Snap Earnings Preview: Can the Social Media Challenger Regain Its Footing?
All eyes will be on Snap Inc. (NYSE: SNAP) this Wednesday as the social media company reports its quarterly earnings after market close. The report comes at a critical juncture for the Snapchat parent, which has seen its stock price struggle despite recent operational improvements.
Last quarter, Snap delivered a modest surprise, beating revenue expectations by 1% with sales of $1.51 billion—a 9.8% year-over-year increase. The company also surpassed EBITDA estimates and reported 477 million daily active users, marking a 7.7% rise. This performance demonstrated resilience in a challenging digital advertising landscape.
For the upcoming report, Wall Street anticipates revenue of $1.70 billion, representing a 9.2% annual growth rate. This would signal a deceleration from the 14.4% growth recorded in the year-ago period. Adjusted earnings are projected at $0.15 per share. Notably, analyst estimates have remained largely unchanged over the past month, suggesting expectations for a steady, if unspectacular, performance.
Snap's track record on earnings day has been mixed; the company has fallen short of revenue forecasts three times in the past two years. The broader consumer internet sector offers a varied backdrop: Meta recently posted a strong 23.8% revenue jump, beating estimates by 2.5%, while Netflix saw a 17.6% increase, edging past forecasts by 0.7%. Their post-earnings stock reactions diverged sharply, with Meta gaining 10.5% and Netflix declining 2.2%.
Beyond the immediate numbers, macroeconomic headwinds loom. Potential shifts in trade policy and corporate tax discussions could dampen business confidence and growth prospects in 2025. The consumer internet cohort has broadly underperformed recently, with share prices down an average of 8.7% over the past month. Snap has fared worse, declining 18.8% in the same period. The average analyst price target of $9.81 sits well above the current share price of $6.70, indicating a significant gap between sentiment and valuation.
Market Voices:
"Snap's user growth is impressive, but monetization remains the unanswered question," says David Chen, a portfolio manager at Horizon Capital. "They've innovated in AR and engagement, but they need to prove it translates to durable ad dollars, especially with TikTok and Instagram as constant competitors."
"This is a make-or-break report," argues Maya Rodriguez, an independent tech analyst known for her blunt commentary. "The stock is in the gutter. Another miss or weak guidance would be a disaster. They're burning through their 'promising story' credit with investors. It's time to deliver profits, not just potential."
"I'm cautiously optimistic," shares Arjun Patel, a retail investor active in tech forums. "The user base is loyal and growing, especially among younger demographics. If they can show any progress on average revenue per user, even modestly, it could be the catalyst for a rebound. The bar seems low right now."
"The comparison to Meta is unfair but inevitable," notes Sarah Gibson, a communications professor. "Snap operates in the same ecosystem but targets a different, more ephemeral content experience. Investors need to evaluate it on its own terms—engagement and innovation—not just as a smaller version of its rivals."