Snap Inc. (NYSE:SNAP) saw a remarkable 12% increase in its share price during the latest trading session, closing at $9.72. This surge was supported by robust trading volume, surpassing the average number of shares exchanged. This positive momentum contrasts with the stock’s 5.2% decline in the past four weeks.
The surge in Snap’s share price can be attributed to internal reports, including a memo from Evan Spiegel, the company’s co-founder and CEO, which hinted at better-than-expected performance in 2024. In this September memo, Spiegel communicated the possibility of reaching over 475 million daily active users in 2024 and projected a full-year advertising revenue growth of over 20% for the same year. Additionally, the memo set a target of achieving an adjusted EBITDA of $500 million in 2023.
In its upcoming quarterly report, Snap is anticipated to report a loss of $0.04 per share, signifying a substantial year-over-year decline of -150%. Revenues are expected to reach $1.11 billion, reflecting a 1.9% decrease compared to the same period last year.
While earnings and revenue growth projections provide insight into a stock’s potential strength, it’s essential to note that trends in earnings estimate revisions are closely linked to short-term stock price movements. As for Snap, the consensus EPS estimate for the upcoming quarter has remained stable for the past 30 days. Typically, a stock’s price doesn’t sustain an upward trajectory without corresponding trends in earnings estimate revisions. It’s prudent to keep a watchful eye on SNAP’s performance to determine if the recent price surge can translate into long-term strength.
Snap Buy rating and operates within the Zacks Internet – Software industry. In the same industry, Freshworks Inc. (NASDAQ:FRSH) recorded a 4.7% increase in its last trading session, closing at $18.58. However, FRSH has faced a -11.3% decline in the past month.
For Freshworks Inc., the consensus EPS estimate for the forthcoming report has remained unchanged over the last month at $0.05. This marks a significant change, with a +600% increase from the company’s reported figures a year ago. Freshworks Inc. is currently holding a Buy.
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Author Faith Yakubu 
