Snap (SNAP) ended the recent trading session at $4.70, demonstrating a +1.51% change from the preceding day’s closing price. The stock exceeded the S&P 500, which registered a gain of 0.81% for the day. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 1.3%.
Prior to today’s trading, shares of the company behind Snapchat had lost 13.94% lagged the Computer and Technology sector’s loss of 1.59% and the S&P 500’s gain of 1.13%.
The investment community will be paying close attention to the earnings performance of Snap in its upcoming release. The company is expected to report EPS of $0.07, up 800% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.53 billion, up 13.97% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $0.6 per share and revenue of $6.7 billion, which would represent changes of +81.82% and +12.89%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Snap. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 13.82% downward. Snap is currently a Zacks Rank #3 (Hold).
Digging into valuation, Snap currently has a Forward P/E ratio of 7.77. This denotes a discount relative to the industry average Forward P/E of 19.31.
One should further note that SNAP currently holds a PEG ratio of 0.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. As the market closed yesterday, the Internet – Software industry was having an average PEG ratio of 1.05.
The Internet – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 90, positioning it in the top 37% of all 250+ industries.
