Snap (NYSE:SNAP) Shares Down 11.3% After Earnings Miss

Shares of Snap Inc. (NYSE:SNAP) dropped 11.3% during mid-day trading on Thursday following a dissappointing earnings announcement. The company traded as low as $5.30 and last traded at $5.2450. Approximately 45,436,791 shares changed hands during trading, a decline of 6% from the average daily volume of 48,151,324 shares. The stock had previously closed at $5.91.

The company reported $0.03 earnings per share for the quarter, missing analysts’ consensus estimates of $0.15 by ($0.12). Snap had a negative net margin of 7.76% and a negative return on equity of 20.91%. The company had revenue of $1.72 billion during the quarter, compared to analysts’ expectations of $1.70 billion. During the same quarter in the previous year, the firm earned $0.01 earnings per share. The firm’s revenue was up 10.2% compared to the same quarter last year.

Key Snap News

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Q4 revenue and profit highlights — Snap reported ~10% revenue growth and a meaningful rise in net income, and management said margins are improving as the company pivots toward more profitable growth. Business Wire: Q4 Results
• Positive Sentiment: Selected analyst upgrades/support — B. Riley upgraded SNAP to Buy after the print, and Bank of America raised its rating to Buy with a $10 target, showing some pockets of optimism among buy‑side analysts.
• Neutral Sentiment: Management actions and filings — Snap filed its 10‑K and emphasized strategic shifts (AI in ads, subscription and hardware focus), providing more disclosure but no immediate reassurance on near‑term top‑line momentum. 10‑K Filing
• Neutral Sentiment: Unusual options and volume — Heavy options activity (large call buying) and elevated share turnover suggest speculative positioning amplified the move after the print.
• Negative Sentiment: Weaker near‑term guide — Snap’s Q1 revenue guide came in below Street expectations, and management excluded potential Perplexity AI sales from guidance because rollout terms aren’t finalized, raising uncertainty about near‑term ad monetization. WSJ: Perplexity Deal Delayed
• Negative Sentiment: User metrics and technical weakness — Daily active users fell ~3M in Q4 and several reports note Snap lost a key technical support level, which can trigger further selling pressure from momentum/quant strategies. Invezz: User Growth and Support Break
• Negative Sentiment: Broad analyst downgrades / price‑target cuts — Dozens of firms cut targets or trimmed ratings after the print (examples: Evercore, JPMorgan, TD Cowen, Cantor, Wells Fargo and others), and the consensus analyst stance has shifted to a “Reduce”/hold bias, increasing selling pressure. The Fly: Evercore PT Cut
• Negative Sentiment: Market takeaway — Despite pockets of positive data (revenue beat, margin improvement), the combination of soft near‑term guidance, slowing user growth and a cascade of analyst target cuts explains why investors sold SNAP shares and pushed the stock lower today.

Analyst Upgrades and Downgrades

A number of analysts have issued reports on the company. Piper Sandler reissued a “neutral” rating on shares of Snap in a research report on Thursday. Susquehanna decreased their price objective on Snap from $9.00 to $6.50 and set a “neutral” rating for the company in a report on Thursday. BMO Capital Markets boosted their price objective on Snap from $12.00 to $13.00 and gave the company an “outperform” rating in a research note on Thursday, November 6th. The Goldman Sachs Group dropped their price objective on shares of Snap from $9.50 to $8.50 and set a “neutral” rating on the stock in a report on Tuesday, January 13th. Finally, Weiss Ratings reiterated a “sell (e+)” rating on shares of Snap in a research report on Wednesday, January 21st. Four equities research analysts have rated the stock with a Buy rating, twenty-two have issued a Hold rating and five have assigned a Sell rating to the company. According to MarketBeat, the company has an average rating of “Reduce” and an average target price of $8.61.

Insider Buying and Selling

In related news, insider Ajit Mohan sold 109,372 shares of the business’s stock in a transaction that occurred on Monday, November 17th. The shares were sold at an average price of $8.34, for a total transaction of $912,162.48. Following the completion of the transaction, the insider owned 5,326,801 shares of the company’s stock, valued at approximately $44,425,520.34. The trade was a 2.01% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, General Counsel Michael J. O’sullivan sold 70,882 shares of the company’s stock in a transaction that occurred on Monday, November 17th. The stock was sold at an average price of $8.34, for a total transaction of $591,155.88. Following the sale, the general counsel directly owned 1,854,982 shares in the company, valued at $15,470,549.88. This trade represents a 3.68% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 393,341 shares of company stock worth $3,169,210 over the last quarter. 22.68% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the company. AlphaCore Capital LLC bought a new position in shares of Snap in the fourth quarter worth $113,000. Independent Advisor Alliance grew its position in Snap by 16.8% during the fourth quarter. Independent Advisor Alliance now owns 14,782 shares of the company’s stock worth $119,000 after buying an additional 2,128 shares in the last quarter. Versor Investments LP purchased a new position in Snap during the fourth quarter worth about $1,473,000. KLCM Advisors Inc. bought a new position in Snap in the 4th quarter worth about $161,000. Finally, Trek Financial LLC raised its holdings in shares of Snap by 33.1% in the 4th quarter. Trek Financial LLC now owns 769,475 shares of the company’s stock valued at $6,210,000 after acquiring an additional 191,199 shares in the last quarter. 47.52% of the stock is currently owned by hedge funds and other institutional investors.

Snap Trading Down 13.1%

The stock has a market cap of $8.83 billion, a PE ratio of -19.02 and a beta of 0.83. The company has a current ratio of 3.67, a quick ratio of 3.67 and a debt-to-equity ratio of 1.57. The firm has a fifty day simple moving average of $7.63 and a two-hundred day simple moving average of $7.87.

Snap Company Profile

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.