Social media giant Snap (NYSE:SNAP) crashed by more than 25% in pre-market trading after missing Q4 revenue estimates and issuing a bleak forecast. The company’s fourth-quarter revenues grew by 5% year-over-year to $1.36 billion, below the consensus estimate of $1.38 billion.
SNAP reported adjusted earnings of $0.08 per share in Q4 compared to earnings of $0.14 per share in the same period last year. This was better than analysts’ estimate of -$0.17 per share. In addition, the company’s daily active users (DAUs) increased by 10% year-over-year to 414 million.
Looking forward, the company has projected Q1 revenues of $1.09 billion to $1.14 billion, indicating a growth of between 11% and 15% year-over-year. However, this was below Street estimates of $1.2 billion. Meanwhile, adjusted EBITDA will likely be between -$55 million and -$95 million in Q1. Furthermore, SNAP estimates DAUs of 420 million in Q1.
Is SNAP a Buy or Hold?
Analysts remain cautiously optimistic about SNAP with a Moderate Buy consensus rating based on eight Buys, 11 Holds, and one Sell. Over the past year, SNAP has soared by more than 40%, and the average SNAP price target of $17.47 implies an upside potential of 0.11% at current levels.
