Should you buy Snapchat stock?

Our website: https://www.overlookedalpha.com Snapchat just posted earnings and the stock cratered 15%. Based on the latest share price, the company has a valuation around 15.5 billion dollars. Looking at the recent figures, it’s easy to see why the stock dropped. Total revenue came in at 4.6 billion for 2022, which was 12% more than the previous year. But revenue for the latest quarter was flat at 1.3 billion. More importantly, the company recorded another quarterly loss, that means the company has lost 1.4 billion dollars over the last 12 months. Even adjusted EBITDA was down 39% to 378 million and free cash flow collapsed 75% to 55 million. That means the company is now valued at 3.4 times revenue, 41 times EBITDA and 282 times free cash flow. Those are not attractive multiples for a company that is no longer showing signs of profitability or growth. And to top things off, management believes revenues could drop as much as 10% next quarter. In fact, pretty much the only thing that went up in Snapchat’s latest report were operating expenses and stock based compensation. Operating expenses grew 25% to six billion dollars. This includes a whopping 35% increase in R & D costs??? Meanwhile stock based compensation increased 28% to 1.4 billion for the year. And it was up 51% on the quarter. So at least executives are making money even if shareholders aren’t. Snapchat appears to be investing heavily in its product with a focus towards augmented reality. But back in the real world, the company appears to be off track. With a market cap above 15 billion this stock is still a sell. But these are my personal opinions, not financial advice. And I have no position in Snapchat stock. #stocks #investing #overlookedalpha #stockstowatch