Back to top

Image: Bigstock

Snap (SNAP) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Snap (SNAP - Free Report) closed at $14.96 in the latest trading session, marking a -0.93% move from the prior day. This move lagged the S&P 500's daily loss of 0.08%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.03%.

Prior to today's trading, shares of the company behind Snapchat had gained 7.09% over the past month. This has outpaced the Computer and Technology sector's loss of 5.66% and the S&P 500's loss of 6.03% in that time.

Investors will be hoping for strength from Snap as it approaches its next earnings release, which is expected to be July 21, 2022. The company is expected to report EPS of -$0.01, down 110% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.16 billion, up 17.73% from the prior-year quarter.

SNAP's full-year Zacks Consensus Estimates are calling for earnings of $0.16 per share and revenue of $5.16 billion. These results would represent year-over-year changes of -68% and +25.4%, respectively.

It is also important to note the recent changes to analyst estimates for Snap. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 4.93% lower within the past month. Snap is currently a Zacks Rank #4 (Sell).

Looking at its valuation, Snap is holding a Forward P/E ratio of 96.09. For comparison, its industry has an average Forward P/E of 45.91, which means Snap is trading at a premium to the group.

It is also worth noting that SNAP currently has a PEG ratio of 4.37. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software was holding an average PEG ratio of 2.38 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 139, putting it in the bottom 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNAP in the coming trading sessions, be sure to utilize Zacks.com.

Published in