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Snap (SNAP) Gains But Lags Market: What You Should Know

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Snap (SNAP - Free Report) closed the most recent trading day at $53.65, moving +0.15% from the previous trading session. This move lagged the S&P 500's daily gain of 0.36%. Elsewhere, the Dow lost 0.12%, while the tech-heavy Nasdaq added 0.69%.

Coming into today, shares of the company behind Snapchat had gained 6.82% in the past month. In that same time, the Computer and Technology sector gained 5.4%, while the S&P 500 gained 4.27%.

SNAP will be looking to display strength as it nears its next earnings release, which is expected to be February 4, 2021. The company is expected to report EPS of $0.07, up 133.33% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $847.44 million, up 51.09% from the year-ago period.

Investors might also notice recent changes to analyst estimates for SNAP. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 9.48% higher within the past month. SNAP currently has a Zacks Rank of #2 (Buy).

Digging into valuation, SNAP currently has a Forward P/E ratio of 250.33. Its industry sports an average Forward P/E of 87.77, so we one might conclude that SNAP is trading at a premium comparatively.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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