$SNAP Beats, Stock Explodes 40% Higher

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SNAP stock exploded more than 40% higher on February 3, 2022, after the company reported awesome EPS and revenue beats.

Snap Inc. Announces Fourth Quarter and Full Year 2021 Financial Results

Snap reported Q4 adjusted EPS of 22c versus the consensus estimate of 10c. The company reported Q4 revenue of $1.3B versus the consensus estimate of $1.2B.

“2021 was an exciting year for Snap and we made significant progress growing our business and serving our global community,” said Evan Spiegel, CEO. “The strength of our core business has enabled us to accelerate our investments in augmented reality, transforming the way that the Snapchat community experiences the world through our camera.” Adjusted EBITDA improved 97% to $327 million in Q4 2021, compared to the prior year. Operating cash flow was $186 million in Q4 2021, compared to $(53) million in the prior year. Free Cash Flow was $161 million in Q4 2021, compared to $(69) million in the prior year.

Annual Financial Highlights

  1. Revenue increased 64% to $4.1 billion in 2021, compared to the prior year.
  2. Net loss improved 48% to $488 million in 2021, compared to the prior year.
  3. Second consecutive year of positive Adjusted EBITDA with $617 million in 2021.
  4. First full year of positive operating cash flow and Free Cash Flow of $293 million and $223 million.

Quarterly Financial Highlights

  1. Revenue increased 42% to $1.3 billion in Q4 2021, compared to the prior year.
  2. First quarter of positive net income as a public company of $23 million in Q4 2021.
  3. Adjusted EBITDA improved 97% to $327 million in Q4 2021, compared to the prior year.
  4. Operating cash flow was $186 million in Q4 2021, compared to $(53) million in the prior year.
  5. Free Cash Flow was $161 million in Q4 2021, compared to $(69) million in the prior year.

Snap price target lowered to $36 from $85 at KeyBanc

On February 3, 2022, KeyBanc analyst Justin Patterson lowered the firm’s price target on Snap (SNAP) to $36 from $85 and keeps an Overweight rating on the shares following Alphabet’s (GOOGL) and Meta’s (FB) earnings reports. The analyst sees ongoing ad measurement headwinds driving shifts out of social, vertical headwinds, and margin pressure from investment. Taken together, multiples should compress, Patterson contends. While he is cautious the degree of margin risk could be a new sentiment overhang, he acknowledges valuation multiples have swung considerably, leaving room for results to be “less bad” than feared.

Snap resumed with a Buy at Stifel

On January 31, 2022, Stifel analyst Mark Kelley resumed coverage of Snap with a Buy rating and $45 price target. The analyst states that he is encouraged by the resiliency of the platform’s user base throughout the pandemic, along with the company’s pipeline of under-monetized and yet-to-be-monetized products. Kelley adds that he sees “significant upside” to his estimate for Snap.

📺 SNAP Wows Investors With Record Earnings! Too Late to Buy SNAP Stock?

SNAP Wows Investors With Record Earnings! Too Late to Buy SNAP Stock?

📉 SNAP Stock Technical Analysis

Snap Stock

The short-term trend is negative, as is the long-term trend but the stock will have a HUGE gap-up open on February 3, 2022, which should see the stock upgraded to a neutral rating. SNAP is one of the lesser performing stocks in the Interactive Media & Services industry. 61% of 78 stocks in the same industry do better. SNAP was making a new 52 week low which is a bad signal. The S&P500 Index is trading in the upper part of its 52-week range, so SNAP was lagging the market but after the huge gap up open anticipated for February 3, 2022, the stock might just be in line with the S&P 500 Index.

The technical rating of SNAP is bad and it also does not present a quality setup at the moment. SNAP stock has a Setup Rating of 1 out of 10. Prices have been extended to the downside lately. For a nice entry it is better to wait for a consolidation. Click here to sign up for email alerts on when SNAP stock consolidates and has a Setup Rating of 8 or higher.

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