Snap Stock Dropped After Q4 Reports Showed It Beat Wall Street Estimates

Snap stock
Snap stock

Thursday reports show that Snap stock dropped about 10% during after-hours trading. This report comes in after the company reported that its revenue, earnings and user growth beat Wall Street estimates for the 4th quarter of the ongoing financial year. However Snap stocks posted its Q1 EBITDA forecast which stands to be much lower than estimated figures.

According to the Q4 earnings report, the company posted its EPS to be 9 cents as opposed to the consensus estimate of 7 cents as forecasted by Refinitiv. The revenue was marked at $911 million beating the estimate of $857.4 million forecasted by several equities’ analysts. The global daily active users (DAU) currently stand at 265 million which tops the estimate of 257.79 million.

Apple’s iOS 14 Privacy Updates Might Affect Snap Stocks

Derek Anderson, the company’s Chief Financial Officer mentioned in a statement that he expects Snap stock to reach the milestone of 275 million DAUs by the Q1 of 2021. Snap’s yearly revenue growth is also likely to increase from an earlier 56% to 60% in the comping quarter. Snap stock has shown brilliant performance in the 4th quarter and is expected to run on the same track to make more progress. But there seems to be a few hurdles that the company might have to overcome first before it begins racing again.

Derek Anderson highlighted in a statement that Snap stocks in the coming quarter might be affected because of campaign issues post the Capitol Hill riots. The company, Anderson mentions, went through an advertising hiatus during this period. Therefore, they started on a slower note than they had expected.

Anderson, in his prepared notes, mentioned that Apple’s iOS 14 privacy updates pose another “risk of interruption to demand”. Stocks of social media companies like Snap stock might be impacted by these changes.