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Snap (SNAP) Stock Sinks As Market Gains: Here's Why

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The latest trading session saw Snap (SNAP - Free Report) ending at $13.33, denoting a -0.89% adjustment from its last day's close. This change lagged the S&P 500's 1.11% gain on the day. At the same time, the Dow added 1.64%, and the tech-heavy Nasdaq gained 1.03%.

Prior to today's trading, shares of the company behind Snapchat had lost 18.83% over the past month. This has lagged the Computer and Technology sector's loss of 5.32% and the S&P 500's loss of 1.16% in that time.

Analysts and investors alike will be keeping a close eye on the performance of Snap in its upcoming earnings disclosure. The company's earnings report is set to go public on August 1, 2024. The company is forecasted to report an EPS of $0.02, showcasing a 200% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.25 billion, indicating a 17.35% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.25 per share and revenue of $5.36 billion. These totals would mark changes of +177.78% and +16.3%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Snap. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.72% lower. Snap currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Snap is currently trading at a Forward P/E ratio of 54.42. This valuation marks a premium compared to its industry's average Forward P/E of 31.06.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 96, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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