Snap Misses First Quarterly Report Estimates

WHAT IT IS

WHY IT MATTERS

Snap Inc.’s first earnings report does not define the company, but is making investors question whether they can compete with rivaling social media companies like Facebook.  Now that Snap Inc. is a publicly traded company, they have to care about meeting Wall Street’s expectations.

  • THE HATERS – “This report shows all”

  • THE OPTIMISTS – “This report is trivial”

WHERE WE ARE NOW

  • Snap Inc. will have to find innovative ways to outperform competitor Facebook.
  • Instagram and Whatsapp, owned by Facebook, continue to release new features that are similar to Snapchat features.
  • Snap Inc. still has a higher growth rate than Facebook and their revenue continues to increase on a quarterly basis.

THINGS TO THINK ABOUT

  • Will advertisers care more about customer engagement than customer size?
  • Is Snap Inc. simply following the patterns set by Facebook and Twitter which is that stock price tends to be highly volatile for the first few earnings reports?