Snap Inc (SNAP) Earnings

Deutsche Bank Reiterates “Hold” Rating for Snap (SNAP)

For Q3, Snap reported 178 million daily active users (DAUs) vs. the 181.8 million expected by analysts.

Snap brought in almost $286 million in revenue during the fourth quarter of 2017, up 72 from the same period the previous year.

Snap shares soared by about 20 percent Tuesday on the strength of its unexpectedly upbeat quarterly report.

"With our plans for user growth, augmented reality, and content in 2018, I have never been more excited about the future of our business".

In the previous quarter, Snap has taken a write-down from poor performance of the Spectacles video sunglasses, and it announced a re-design of the app that would make it easier for users to use. Then, the company fell out of favor on Wall Street, hit by a slew of analyst downgrades. Vetr raised Snap from a "strong sell" rating to a "hold" rating and set a $16.13 target price for the company in a report on Friday, October 13th.

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Snap shares have tumbled since a keenly anticipated public offering in March 2017 at US$24, on concerns that it may not be able to keep pace with rivals like Facebook in the fast-evolving world of social media.

"Our work during 2017 is proof that we aren't afraid to make big changes for the long-term success of our business", Evan Spiegel, the cofounder and CEO of Snap, said in a statement. Twitter's expense of $600 million in 2013 was slightly less than its revenue, while LinkedIn had just a $30 million expense and $522 million in sales in 2011, the year it debuted on the market. In the new version, users' Discover Stories and friends' stories will reportedly be separated, which means there will be fewer chances for curious users to click on publishers' content, which could further hurt Snap's advertising efforts. The business had revenue of $207.90 million during the quarter, compared to analysts' expectations of $236.71 million.

Snap spends a ton of money and the company is still not profitable.

Average revenue per user grew 46% year over year to $1.53, which is much better than the $1.36 per user that had been estimated prior to the Snap Inc (SNAP) earnings release.

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