SNAP
📉 The stock price has frequently fluctuated between $7-$8 and $12-$13, offering potential trading opportunities (nearly 100% gain if bought low).
💰 Snap has achieved positive free cash flow ($218M TTM), a significant improvement, although it still doesn’t generate net profits.
📈 Revenue growth has slowed but is projected around 16%, however, the forward P/E of 22 is still demanding, making it a speculative bet on continued FCF improvement and growth re-acceleration.
@bernardodegarcia:
“What about Snap? Snap doesn’t exist, right? How are they? How is the United States? Well, the United States FTC, I think it is, I don’t even know who it is anymore, suing Facebook for monopoly. Snap? What is Snap? Snap must be… must be a snack. Snap Snack. Must be delicious. No, Snap below $10 seems great to me. Below $8 seems like a buy, buy, buy. I think it reached that zone these days. There it is. There you have it. I think, hey, if you’re interested in a ‘palomita’ [speculative bet], go for it. Because this company, look how many times it’s been at $7. Look how many times it’s reached $12 and $13. This is almost a 100% gain in Snapchat simply by buying well. It doesn’t seem bad to me as something… Let’s take a look at Snap’s numbers and stuff. There we have them. Okay. It has positive Free Cash Flow. That’s already much better than I expected. Ah, I know what the problem is. It’s still trading at a forward P/E of 22. It’s somewhat demanding. The ROIC doesn’t worry me, but this is the problem. The ROIC too… Well… I put this here. This is the problem. The problem is that its revenues have become a bit anemic compared to what they were, but well, growing 16% isn’t bad at all. Profits? It doesn’t generate profits, but who wants profits when you have free cash flow? I mean, what are we doing here? We’d have to look exactly at what this free cash flow is like, but hey, with $218 million of free cash flow… yes, it can… put a… it’s coming out of the pit. Look at this. In 2022, it started reporting positive free cash flow. It fell throughout 2022, 2023, until 2024, and starting in 2024, it rises again. Of course, the question is, will its upward trajectory of free cash flow continue? Let’s see if it maintains it. That already seems interesting to me.”
Watch the exact part of the video where @bernardodegarcia talks about Snap Inc. here:
Watch the video on YouTube
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