StashLearn
Financial education, no lectures.

Follow and listen to our podcast

Get the app
Teach MeMoney NewsMoney TalkStash
Money News

Why Snap’s Share Price is Suddenly Popping

February 07, 2018

  • Snap reported stronger than expected revenue in its earnings report
  • Increased revenue came from robust ad sales
  • The financial report sent Snap’s share price up by 40% the following day
1 min read

Snapchat is back in the game.

The social networking app surprised investors on Tuesday by reporting strong growth in its fourth quarter.

The creator of the disappearing instant message service has disappointed investors for months with poor earnings and a flagging stock price, which has fallen by nearly half since a high of $27, shortly after its initial public offering in March, 2017.

Why is Snap popping?

Although Snap reported a loss of $350 million in the fourth quarter of 2017, its revenue increased 72% to $286 million compared to the fourth quarter of 2016, according to its most recent filing with Securities and Exchange Commission (SEC).

The revenue increase stemmed from strong ad sales, according to reports. Snapchat’s use of self-serve software for advertisers increased ad impressions–or the number of times an ad is viewed–by 575% in the quarter, according to Reuters.

The social networking app surprised investors on Tuesday by reporting strong growth in its fourth quarter.

Snap also reportedly tripled the number of advertisers buying on its automated auction site over the same time period.

Revenue per user, an indication of how much money each customer earns Snap, increased 46% to $1.53, according to the company. And the number of Snap’s daily active users increased 5% to 187 million in the quarter.

News of the good quarter–the first time the company beat analyst expectations since it went public, according to Bloomberg–sent Snap’s shares up about 40%, to $20.67 in late afternoon trading Wednesday. *

Other things to keep in mind:

*Source: Yahoo Finance, Wednesday, February 7.

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

Next for you
China Social Media Giant Tencent is Now More Valuable Than Facebook

Investment Profile

Blue Chips

Invest in some of America’s largest and most established companies.

Learn more
Explore more articlesChoose a topic to learn more about
politics budgeting Retirement Technology love and money
Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.