Snap’s Weak Comeback

By Douglas A. McIntyre Updated Apr 29, 7:26AM EDT · Published Apr 28, 5:54AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Snap’s Weak Comeback — © snapchat (CC BY 2.0) by Stock Catalog

Snap Inc. (NASDAQ: SNAP | SNAP Price Prediction) announced earnings recently. They were better than expected. The stock rose a breathtaking 28% to $14.55. However, over the past five years, they are down 49%. The S&P 500 is up 23% in the same period. Shares of much larger rival Meta Platforms Inc. (NASDAQ: META) are up 121%. Just a few months ago, worry about Snap’s prospects cratered its shares.

Snap has a problem in the social media world: It is too small to matter. Some people disagree. They believe that, although small, Snap has discovered ways to attract more advertising dollars, which are at the heart of its revenue. “Years of diligent work are beginning to pay off for Snap’s ad business,” said Max Willens, senior analyst at Emarketer, to Yahoo! Finance.

Snap’s revenue rose 21% in the most recent quarter to $1.2 billion. However, it lost $333 million, up 9% from the same period the year before. Evan Spiegel, CEO, described the cause for the improvement. “The value we provide our community and advertising partners has translated into improved financial performance.” Snap did have one very good piece of news. Daily active users (DAU) rose 10% to 422 million.

Meta, Facebook’s owner, released disappointing earnings days before Snap did. However, they showed how small Snap is and that its growth rate is not impressive. Meta revenue rose 27% to $36.5 billion. Net income rose 117% to $12.4 billion. Family daily active people (DAP) rose 7.7% to an average of 3.24 billion in March.

Snap is not a social media player of any consequence. So, its comeback doesn’t matter either.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.