Snapchat Beats Estimates But Tariff Fears Trigger Stock Drop
📈 Snapchat surpassed Q1 revenue estimates but caused concern by refusing to issue a sales forecast for the current quarter, citing macroeconomic difficulties and potential impacts on its advertising business.
😟 The company highlighted uncertainty around planned changes by the Trump administration to the 'de minimis' rule, which could impose tariffs on low-value imports from China, potentially affecting advertiser spending.
📊 Despite the guidance withdrawal and subsequent 14% stock drop, Snapchat reported strong user growth (Daily Active Users +9%) and a significant increase in active advertisers (+60%), presenting a mixed picture for investors.
Snapchat’s Snap Back: User Growth Impresses, But Can It Turn Profitable?
👥 Strong user growth continues, surpassing 900 million monthly active users, indicating sustained platform relevance.
📈 Revenue grew 14% year-over-year, losses narrowed significantly, and adjusted EBITDA, operating cash flow, and free cash flow showed improvement.
⚠️ High stock-based compensation remains a major drag on actual profitability, turning positive operating cash flow negative when accounted for.
Snapchat Stock: A Speculative Buy Below $10?
📉 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.
