That has led the stock to trade at levels not too far from right before it reported those strong earnings. Yet the stock has plunged alongside the rest of tech amidst the broader tech crash. The company reported strong results in the latest quarters which easily set the tone for social networking peers. Ads on this platform could be valuable considering Snap’s young demographic which is quite difficult to reach with linear TV or commercial-supported streaming.Snapchat ( NYSE: SNAP) is exactly the kind of stock investors should be flocking to in the current market. The Discover section of its app, which offers curated content, reached an audience of over 100 million people on Snapchat this year. Separately, the company is also gaining traction in the content space. The growing user base, coupled with improving technology – such as Dynamic Ads which creates ads in real-time - could enable the company to boost ARPUs and overall revenues. Sure, part of this was due to Covid-19 and the related lockdowns, which forced people to stay home and socialize online, but Snap has actually seen growth in daily active users pick up over the last few quarters as well (it added a total of 52 million subscribers since Jan 2019). Firstly, Snap’s daily active user base has been expanding sharply, rising by about 17% y-o-y to 238 million during Q2 2020. There are multiple trends that support this continued growth. Snap’s Revenues could grow by over 3x from estimated levels of a little over $2 billion in 2020 to close to $5 billion by 2025, representing a growth rate of roughly 31% per year (for context annual growth was about 60% between 20).
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