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Thanks to user bump, Snap stock is spiking after earnings beat

Thanks to user bump, Snap stock is spiking after earnings beat
[Photo: Adam Birkett/Unsplash]

Even though Snapchat’s parent company, Snap Inc., is still operating at a loss, its stock is seeing a big after-hours jump. This is because it delivered a solid earnings beat this past quarter. Here are some of the big takeaways:

  • Loss-per-share was 10¢, compared to an expected 12¢.
  • Revenue this past quarter hit $320 million, exceeding analyst expectations of $306 million.
  • Daily active users went up to 190 million, up from 186 million last quarter, but still down from the 191 million reported this quarter last year. FactSet estimated the company’s DAUs would hit 187.22 million.

On all three counts, this is a big beat. And Snap stock is responding. Shares spiked as much as 10% in after-hours trading. Currently, they’re up about 7% at $12.82.

This beat follows a recent high-profile analyst upgrade. BTIG’s Rich Greenfield deemed the stock a “buy,” and gave it a price target of $15. He reasoned that advertising seemed to be surging on the platform and that its Discover feature is doing better than before. This quarter’s results show that Greenfield may have been onto something.

In prepared remarks for the earnings call, chief business officer Jeremi Gorman pointed to Snap’s burgeoning ad business as its growth engine. She said the company is seeing more brand partnerships–as well increased use by advertisers while the company builds out more ad products. It is, however, still unclear how long it will be until the social network app is able to turn a profit.

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