I currently am long SNAP 40,000 shares at $6 which means I am down roughly 15 % but here is the catch.
The stock is going to go to $6 as we approach earnings in the next couple of weeks and after earnings the stock is going to go to $7.
It’ll be nice to finally be in the green but I’m in no hurry to cash out. Specs (the AR glasses) is going to be a huge catalyst for getting the stock to move above and beyond. I think it’s very safe to assume it’ll touch $15 by December.
Even if Specs doesn’t get the stock there, Snapchat+ subscriptions will. For years SNAP has suffered from the lack of profitability in Snap Inc but they’ve finally gotten around to monetize their services. Whether it’s for cool features like a more advanced Snapchat map or more emojis, or if it’s for an ad free experience, or if it’s to keep your ‘memories’ from getting deleted by buying storage- I’m telling you, Snapchat+ is absolutely going to make the company profitable at last.
Their most recent quarter was profitable. Their net income was $42 million. Now, because of geopolitical issues they were very cautious with the outlook they provided for the next quarter, and for the full year even. But, while ad revenue remains their primary source of revenue it isn’t the only one. ‘Other revenue’ which consists of no ad revenue whatsoever is strictly high margin revenue from Snapchat+ and Storage subscriptions. And, a few years ago they had like 5 million subs. Next year 15 million subs. The year after that 25 million subs- and these subs have already generated $1 billion in revenue in less than three years.
Snapchat stock is cheap because of share dilution (SBC’s) and insider selling. Additionally, it’s cheap because of sentiment as many say Snapchat is a dying app. Well, SBC’s and insider selling remain the same but revenue and profits do not. Year over year revenue and profitability keeps growing while share dilution and insider selling do not increase.
And as for Snapchat being a dead app. It’s just not true. They have close to 1 billion active monthly users and about half as many daily active users. What’s happening is market maturity in North America especially and to a lesser degree in Europe. Which is exactly why they’ve pivoted to profitability instead of growth. Essentially, Snapchat is mimicking Spotify or Netflix. Can you believe Snapchat was a 100 % free platform for years? And, it was ad free. Now, it has both ads and a lot of payable content.
What about legal regulations.. EU investigation.. Greece banning social media for under 16 year olds. I mean, sure it’s not what Snap Inc wants but ironically I think it’s a blessing in disguise for shareholders. It’s a force to be reckoned with. Evan Spiegel said it himself- 2026 is a crucible year for Snapchat. It’s now or never. Monetize the platform and save the company, especially seeing as Specs AR glasses are releasing in 2026 and they just signed a multi year long deal with Qualcomm. They need money. Legal bans, AI capex and market maturity or saturation are forcing Evan Spiegel to start monetizing. And he’s doing it. Like I said- the most recent quarter was their first ever profitable one. I don’t expect the next one to also be profitable but YoY I expect the net loss to be way smaller.
Snapchat stock has little downside and a lot of upside
byu/lies_are_comforting inStockMarket
Posted by lies_are_comforting
9 Comments
ill look into it
Why keep posting the same post?
Username checks out.
Let’s say you’re right, do you really feel like this is the best place to park your money and/or bet on a turnaround? Of all the beaten down stocks, this is really the one that you think has the most potential/is mispriced?
Although teenagers do, I don’t think most adults use Snapchat, so it’s missing a huge swath of demographics. Serious question, why do you think Snap can popularize AR at $3B when Meta has all but given up after $70B?
was hearing the same thing when snap was at 9$ okay buddy
“Just like every ‘no downsides’ thread that appears before the downsides get posted”
Snap is not necessarily a poor company, but saying it is a low-risk play despite being unprofitable, heavily reliant on advertising revenue, and battling with tech giants is stretching it. Augmented Reality may be cool, but it has been called “the next big thing” since forever.
Seems to me like an alright turnaround story more than anything else, honestly.
Total number of North America users, which are the most monetizable, has not grown in years. And the app is shit bc it’s already monetized to hell. Most recent quarter even has global users down.
I’m an “old” user that uses snap to stay in touch with a handful of college friends. But it has a bad connotation across the current younger generation. If you use Snap, you are seen as shady. They all use instagram instead.
There’s no need for the younger generation to ever consider snap when they can just message and “snap” each other on instagram, which is what they already do.
Their only unique thing is snapmap, but it’s not that novel or useful to younger users. And if it was, instagram would have their own version of it overnight.
It’s a dying app and a garbage stock to own. Your username is appropriate.
The play with Snap at this price is that their CEO will make a “Year of efficiency” announcement similar to Meta. I think there is a decent chance that this will happen and stock might go to 7 near term. AR glasses will probably be a failure and should be shut down