[ad_1]
share in snap (SNAP) fell sharply on Wednesday after the social media platform reported fourth-quarter adjusted profit that beat expectations, but revenue fell short of Wall Street’s targets. The company plans to increase its investment in Snap stock as competition for consumer social media usage intensifies.
X
Snap announced its fourth quarter results after the market closed on Tuesday. On the stock market today, Snap stock plunged 33% to 11.68 in morning trading. The company owns and operates his Snapchat social media app.
Snap faces fierce competition from meta platform (META), TikTok, alphabet(GOOGL) is the fastest growing YouTube short video service.
Snap daily active user growth slows down
In the December quarter, Snap’s daily active users increased by 8 million compared to an estimated 6 million. However, Snap added 12 million daily active users in the December 2022 quarter.
In North America, daily active users decreased by 1 million in the fourth quarter from the September quarter. The company ended 2023 with 414 million daily active users, an increase of 10% year over year.
Snap told analysts it expects to add 6 million daily active users in the current quarter, which ends March 31.
Snap expects first-quarter 2024 EBITDA (earnings before interest, taxes, depreciation, and amortization) losses to be in the range of $55 million to $95 million, significantly higher than expected EBITDA losses of $25 million. exceeds. Snap plans bigger investments to improve consumer engagement.
“Management cited continued investment in hopes of increasing engagement and profitability over the long term,” TD Cowen analyst John Blackledge said in a report. “Management also expects timing-related marketing expenses to increase in the first quarter.”
Snap reported fourth-quarter adjusted earnings of 8 cents per share, compared with 14 cents a year earlier. Analysts had expected adjusted earnings of 6 cents per share.
Snap’s revenue for the fourth quarter rose 5% to $1.36 billion, below expectations of $1.38 billion.
Snapstock technical evaluation
The social media company’s September quarter sales also rose 5%. Sales in the first two quarters of 2023 were declining.
Adjusted earnings before interest, taxes, depreciation and amortization, also known as EBITDA, were $159.1 million. Analysts had estimated fourth-quarter EBITDA of $110.3 million.
For the current March quarter, Snap expects revenue to be in the range of $1.095 billion to $1.135 billion, compared to expectations of $1.12 billion. At the midpoint of its guidance, Snap is expecting $1.115 billion, below views.
Snap still gets the majority of its advertising from digital ads. The company’s emerging subscription service “Snapchat+” had 7 million subscribers as of December 12, 2023, and 5 million as of September 30.
Snap stock established an entry point of 17.90. The stock has an IBD Relative Strength Rating of 97 out of 99, according to IBD Stock Checkup.
Snap announced Monday that it plans to cut 10% of its workforce in 2024 as part of a restructuring plan. Snap had about 5,300 employees as of the third quarter of last year.
Snap will cut 20% of its workforce in August 2022.
Follow Reinhard Krauss on X, formerly known as Twitter. @reinhardtk_tech Get the latest information on artificial intelligence, cybersecurity, and cloud computing.
You may also like:
IBD Digital: Get access to IBD’s premium stock lists, tools and analysis now
Learn how to time the market with IBD’s ETF Market Strategy
Get the free IBD newsletter: Market Prep | Technical Reports | How to Invest
[ad_2]
Source link
