Sometimes you can do everything right and still lose. That's the story for Snap Inc. (SNAP) on Thursday, where a perfectly decent earnings beat couldn't save the stock from a brutal selloff. Shares declined even after the social media company crushed analyst expectations in its fourth-quarter results released Wednesday evening.
The broader context matters here: technology stocks got hammered across the board, with the Nasdaq sliding 1.68% and the S&P 500 dropping 1.33%. When the tide goes out, even the good swimmers struggle.
The Numbers Look Pretty Good, Actually
Snap reported quarterly earnings of three cents per share, which doesn't sound impressive until you realize analysts expected a three-cent loss. That's a solid six-cent swing in the right direction. Revenue came in at $1.72 billion, beating the consensus estimate of $1.702 billion by 0.84%. Year-over-year, that represents a respectable 10.21% jump from $1.557 billion in the same quarter last year.
The User Problem
Here's where things get complicated. Daily active users fell to 474,000 in the fourth quarter, down from 477,000 in the third quarter. That's not the trend you want to see in social media, where engagement is everything.
The silver lining? Monthly active users hit 946 million globally, up 51 million or 6% year-over-year. So people are still showing up—just not every single day.
What the Charts Say
The technical picture is rough. Snap is trading 29.1% below its 20-day simple moving average and 32.4% below its 100-day SMA, which signals serious bearish pressure. Over the past year, shares have cratered 49.62%, and they're sitting much closer to their 52-week lows than highs.
The RSI stands at 21.44, firmly in oversold territory, which theoretically suggests a bounce could be coming if buyers decide to jump in. But the MACD remains below its signal line, pointing to continued bearish momentum. It's a mixed picture—oversold but still trending down.
- Key Resistance: $7.50
- Key Support: $5.00
What Analysts Think: The consensus rating is Hold with an average price target of $10.01. Recent moves include:
- Evercore ISI Group: In-Line (lowered target to $9.00) on February 5
- Wells Fargo: Equal-Weight (lowered target to $8.00) on February 5
- Cantor Fitzgerald: Neutral (lowered target to $7.00) on February 5
Price Action: Snap shares were down 8.63% at $5.40 at the time of publication on Thursday.
