Published first at http://www.3minutebreakdowns.com Snapchat stock analysis. Ticker: $SNAP Snapchat reported earnings last week and the stock collapsed 35%. At the latest price, the company has a market cap of 19 billion dollars. Revenue over the last 12 months is 4.6 billion with 162 million of ad...

Published first at http://www.3minutebreakdowns.com Snapchat stock analysis. Ticker: $SNAP Snapchat reported earnings last week and the stock collapsed 35%. At the latest price, the company has a market cap of 19 billion dollars. Revenue over the last 12 months is 4.6 billion with 162 million of adjusted ebitda. But Snapchat is still unprofitable. Stock based compensation is a staggering 1.3 billion and so net income over the last 12 months is also sharply negative. Even free cash flow is tiny at 35 million. Despite the weak fundamentals, Snapchat was one of the best performing stocks last year and during the last few months of 2023 the stock rallied over 100%. That performance came as investors spotted signs of a turnaround in Snapchat’s performance. Revenue grew 5% in Q3 and Q4 and daily active users continue to advance reaching 414 million. Perhaps more importantly, Snapchat rolled out a number of AI tools and saw promising uptake for its subscription product Snapchat+. The number of subscribers grew 40% in Q4 to 7 million and now management thinks next quarter revenue could climb as much as 15%. So although Snapchat has a history of shareholder destruction there is a path to strong returns, based on the company’s high operating leverage. On the latest conference call, the Snapchat CFO said that incremental revenues are flowing to profits with a high margin of 67%. #investing #stocks #snapstock #3mb