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SNAP trade ideas

$SNAP A Mixed BagAlthough it is up 43% YTD, Snap, Inc (NYSE: SNAP) is witnessing some concerning signs due to the slowdown in active users growth as well as the decline in average revenue per user. Based on these factors it is highly likely that the company misses on its revenue estimates in its Q2 earnings set to be released on July 25 after hours. Despite this, the company has been adding subscribers to its Snap+ service and could be on track for an EPS beat in its Q2 earnings. In light of this, SNAP stock could be one to watch closely ahead of its earnings. SNAP Fundamentals Decelerating Growth SNAP’s position as a social media company means that user growth is its most important metric, since no matter how good the product, is no one is going to use a platform that no one else uses. This makes the decelerating user growth the company is seeing a major concern as its daily active users’ growth has been decelerating for 2 straight quarters now. The decelerating growth can be attributed to the stagnation the North American market is seeing. SNAP has maintained 100 million DAU in North America for three quarters straight. What makes this worse for SNAP is that North America has the highest average revenue per user (ARPU) amongst all regions, and countries outside of North America and Europe which are seeing the highest growth in DAU have the lowest ARPU. Another thing to take into consideration is while North America has by far the highest ARPU compared to other regions, North America is currently seeing the lowest ARPU since Q2 2021. While it is concerning, it also means that SNAP still has room to improve its revenues if it can return to the previous levels of ARPU in North America. Snap+ and My AI While SNAP has suffered from slower growth in almost every area of its business, its subscription service Snap+ has grown more than 33% QoQ from 3 million subscribers to 4 million subscribers. With the subscription costing $3.99, that means that SNAP will realize around $48 million in quarterly revenue and $192 million annually from Snap+ alone. Furthermore, Evan Spiegel, SNAP’s CEO, said that more than 150 million users have used the new chatbot My AI since it was released to all of its users. While My AI can’t compete with other Large Language Models (LLMs) like Microsoft’s (NASDAQ: MSFT) ChatGPT, it can be another way that SNAP can increase its ad revenue since it can use sponsored links that are relevant to the conversation which it has already tested in May. Q2 Forecast Using SNAP’s DAU numbers for the last 6 quarters, its estimates for North America, Europe, and RoW are around 101.2 million, 95.6 million, and 202.89 million respectively. According to the linear regression trendlines in the chart below, total DAUs can be forecasted to be around 399 million users. That would mean that SNAP’s revenues would reach $1.01 billion assuming the ARPU it recorded in Q1 2023 stays roughly the same. Adding revenue from the new one million subscribers to SNAP+ would make SNAP’s total Q2 revenues around $1.022 billion which is less than analyst estimates of $1.054 billion. Furthermore, SNAP’s cost of revenue and operating expenses are expected to remain relatively flat according to management at around $440 million and $910 million, respectively. This means that SNAP would record a net loss of $328 million and an EPS of -$0.205, which is better than analysts’ estimates of -$0.247. For this reason, SNAP stock could be set to run on an EPS beat – especially with the stock trading near the lower trendline of its upward channel. SNAP Financials In its Q1 2023 report, SNAP’s total assets decreased 1.25% QoQ from $8 billion to $7.9 billion due to a decline in its accounts receivable. While its cash and cash equivalents increased 13% QoQ from $1.4 billion to $1.58 billion due to $100 million of free cash flow being generated in Q1 2023. SNAP’s total liabilities decreased by 2% QoQ from $5.4 billion to $5.3 billion. Revenue also decreased 7% YoY from $1.06 billion to $0.988 billion due to the decline in ARPU. Operating costs stayed roughly the same compared to last year at around $914 million. While operating loss decreased 8.5% YoY from $351 million to $321 million due to an increase in interest income from investments in government securities. This all amounted to a net loss of $328 million – a 9% decrease YoY. Technical Analysis SNAP stock’s trend is bullish with the stock trading in an upwards channel. Looking at the indicators, the stock is trading below the 50, and 21 MAs which is a bearish indication, and above the 200 MA which is a bullish indication. Meanwhile, the RSI is neutral at 40 and the MACD is approaching a bullish crossover. As for the fundamentals, the upcoming Q2 2023 earnings will be a catalyst for SNAP stock. If SNAP beats its EPS estimates it can cause its stock to maintain its momentum and run which makes the current PPS an attractive entry point ahead of earnings as the stock is currently testing the lower trendline. SNAP Forecast While SNAP is working on increasing its ad revenue using its My AI chatbot and its Snap+ subscription, it is currently seeing stagnation in its active users’ growth in North America – its biggest market revenue-wise. That said, there is a strong possibility SNAP stock runs post earnings as it may beat EPS estimates based on our calculations. With the stock trading at the lower trendline, bullish investors could find a good entry into SNAP stock at current levels in anticipation of its Q2 earnings on July 25 after hours.
NYSE:SNAP
by Penny_Stocks_Today
Snap May Be Vulnerable as Earnings ApproachSnap has moved sideways for a year, but some traders may expect its prior downtrend to resume. The first pattern on today’s chart is the series of bearish gaps following the last four quarterly reports. The social-media stock held its ground after those drops -- probably because it had already lost about 80 percent of its value in the preceding nine months. But now it’s had an entire year to consolidate. Next, SNAP rallied about 75 percent between early May and mid-July along with the Nasdaq-100. Does that create space to the downside? Third, Wilder’s Relative Strength Index (RSI) just hit its most overbought level since October 2020. That may represent a peak. Recent sessions could also be viewed as a top, with a shooting star on July 13 and then solid candles as intraday highs got sold. SNAP ended that phase by closing below its 8-day exponential moving average (EMA). All these points may be important with earnings tomorrow afternoon. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
NYSE:SNAP
by TradeStation
SNAP Options Ahead of EarningsIf you haven`t sold SNAP here: or ahead of the previous earnings: Then analyzing the options chain and chart patterns of SNAP prior to the earnings report this week, I would consider purchasing the 13usd strike price Calls with an expiration date of 2023-7-28, for a premium of approximately $1.34. If these options prove to be profitable prior to the earnings release, I would sell at least half of them. Looking forward to read your opinion about it.
NYSE:SNAPLong
by TopgOptions
SNAP continues to hold back bulls.Snap - 30d expiry - We look to Sell at 12.59 (stop at 13.59) 13 continues to hold back the bulls. The primary trend remains bearish. Preferred trade is to sell into rallies. We are trading at oversold extremes. We look for a temporary move higher. 12.94 has been pivotal. In our opinion this stock is overvalued. Our profit targets will be 10.09 and 9.59 Resistance: 12.35 / 12.94 / 13.50 Support: 11.64 / 10.80 / 10.00 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
NYSE:SNAPShort
by VantageMarkets
Snapchat Volatility Squeeze Setup Snap has broken above all major daily, weekly, and monthly moving averages with the exception of the 20month which is about 75% higher than the current price. The Bollinger Band Bandwidth is at a 19-month low which is a precursor to a volatility squeeze. Accumulation/Distribution and On Balance Volume suggest upside breakout of current June sideways range. This is a fairly risky swing trade with the Q2 report in a few weeks so I’ll keep an eye on the price action for a possible day trade entry and may hang on to some shares overnight and beyond depending on how things go. Call options may be appropriate here.
NYSE:SNAPLong
by Skipper86
Can we snap $16 in coming weeks?NYSE:SNAP was forming an ascending triangle from Oct'22 and we broke the pattern in April upon earnings. But the market seems to be rushing back in the triangle again. With that, the fair value estimated by analysts is $16 as well. It'll be interesting to see if we can close above $10.8x and start moving upwards. The stock currently seems to be following an upward channel (marked in blue) and we're at a crossroad today. Disclaimer: This is not financial advice. Please make your own decisions while making an investment.
NYSE:SNAPLong
by mustafa_bey
1
Applying Warren Buffett and Peter Lynch valuations : SNAP stockWhen I was new, I traded just the picture of prices. Later after living through a full cycles, I learned stocks were actually businesses. Business sell stuff to customers and generate revenue each year. Businesses have cash flows and earnings. Thats why when we look book 10 to 20 years, most businesses are more valuable today then back then. Valuation looks at what things are worth today and also looks at future potential. Financial math is discounting the the future growth to make sure you get the best deal you can. Valuation keeps you grounded. You can still day trade, swing trade, and option trade all you want. Valuation just helps you know the true value inside the business so you avoid some losers and pick more winners. Cheers and good luck on your journey! #snap #warrenbuffett #peterlynch
NYSE:SNAP
by ValuePig
7