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Snap Inc (SNAP) Still Has A Lot Of Problems To Fix

SNAP – One good quarter doesn’t mean Snap has solved its numerous issues.


Snap Inc (NYSE:SNAP) shares surged last week after the company posted its first-ever earnings beat and reported better than expected user growth — particularly at the international level.

But not everyone is convinced the messaging app maker has actually turned things around.

Count analyst Sameepa Shetty over at CNBC among the doubters, as she just penned a scathing review of the company’s yet-unsolved problems:

The fourth quarter earnings beat came after three consecutive quarterly misses. With that in mind, Snap’s price action in 2018 shouldn’t take away 2017’s problems that kept the stock below its IPO price for most of the year. They haven’t left yet.

Those problems include a high cost base, basic lack of product understanding among both advertisers and users, and an often naïve leadership.

Shetty notes that Snap still faces a major problem in that its app is simply too complicated for most people to use. That’s a compelling argument, considering that an app with 187 million users felt compelled to completely redesign its platform (and note that many people, including its former long-term users, are still having trouble figuring it out).

The analyst also points out that it isn’t just users that have usability issues. Advertisers, too, still can’t quite figure out how to market to Snap’s youth-leaning user base.

The bottom line is, Snap had one good quarter that offered the first glimmer of hope that it can turn things around. Beyond that, the jury is still out whether it can sustain any of the gains it made — or if the stock, which has plunged 24% since its IPO a little over a year ago — will remain a dud.

Snap Inc shares fell $0.08 (-0.43%) in premarket trading Tuesday. Year-to-date, SNAP has gained 27.52%, versus a -0.57% rise in the benchmark S&P 500 index during the same period.

SNAP currently has a StockNews.com POWR Rating of D (Sell), and is ranked #32 of 50 stocks in the Internet category.

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SNAP at a Glance

SNAP Current POWR Rating™
Overall POWR Rating™
SNAP Current Price $10.71 1.04%
More SNAP Ratings, Data, and News

SNAP Price Reaction

The day of this event (Feb. 13, 2018)
SNAP Closing Price$18.58 0.27%
SNAP Volume28,873,200
9.99% from avg
Leading up to this event
SNAP 1-mo returnN/A%
After this event
SNAP 1-day return4.75%
SNAP 3-day return8.77%
SNAP 5-day return0.05%

SNAP Price Chart



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