Snap (SNAP) Falls More Steeply Than Broader Market: What Investors Need to Know

In the latest trading session, Snap (SNAP) closed at $4.86, marking a -1.02% move from the previous day. This change lagged the S&P 500's 0.08% loss on the day. Elsewhere, the Dow saw a downswing of 0.61%, while the tech-heavy Nasdaq appreciated by 0.08%.

The company behind Snapchat's stock has dropped by 6.12% in the past month, falling short of the Computer and Technology sector's loss of 2.38% and the S&P 500's loss of 2.16%.

The upcoming earnings release of Snap will be of great interest to investors. The company is predicted to post an EPS of $0.08, indicating a 100% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $1.52 billion, up 11.78% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $0.51 per share and a revenue of $6.78 billion, signifying shifts of +54.55% and +14.28%, respectively, from the last year.

Any recent changes to analyst estimates for Snap should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 8.7% higher. Snap is currently sporting a Zacks Rank of #3 (Hold).

Looking at valuation, Snap is presently trading at a Forward P/E ratio of 9.58. This signifies a discount in comparison to the average Forward P/E of 20.22 for its industry.

Meanwhile, SNAP's PEG ratio is currently 0.28. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.15.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNAP in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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