9/4/2023 0 Comments Snap stock charts![]() I had backed away from Snap at this point and left it in the overvalued bin in my mind as things got frothy. Enough, though, to get the market excited. Growth was seeing some revisions upward over the year, but only by 15% on average. There was so much bullishness that the multiple continued to expand throughout the past year-and-a-half while moving somewhat sideways over the last six months. In other words, the bet was on perfection in execution. Things would have to go pretty much above estimates to meet the actual expectations of the market. ![]() While you could make an argument the valuation matched the growth estimates, you'd have to factor in the sizable risk. Its price-to-sales ratio was as high as 37.5 in September, while revenue growth estimates were as high as 48% and 51% for the upcoming Q4 and Q1 periods, respectively. ![]() Snap was priced relatively high, even for the growth Wall Street was expecting. Thus, Snap's stock is closing in on an attractively priced area for the first time in quite a few quarters. However, the drop in the stock price brings the valuation and estimates closer in line. There are a few headwinds the company will continue to see near term, and it's going to take longer than if it were a Facebook ( FB ) level advertiser to overcome the headwinds. The market reacted by beating the stock down more than 25%. But the rougher news was Q4 guidance fell well short of estimates. Snap ( NYSE: SNAP) had a very rough Q3 earnings report, missing on the top line for the quarter. Neilson Barnard/Getty Images Entertainment
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