Snap (SNAP) Declines More Than Market: Some Information for Investors

In the latest close session, Snap (SNAP) was down 1.3% at $4.56. This move lagged the S&P 500's daily loss of 0.28%. Elsewhere, the Dow saw a downswing of 0.44%, while the tech-heavy Nasdaq depreciated by 0.28%.

The company behind Snapchat's shares have seen a decrease of 5.33% over the last month, not keeping up with the Computer and Technology sector's loss of 2.12% and the S&P 500's loss of 3.59%.

Investors will be eagerly watching for the performance of Snap in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.08, marking a 100% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $1.52 billion, up 11.78% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.5 per share and a revenue of $6.76 billion, indicating changes of +51.52% and +13.89%, respectively, from the former year.

Any recent changes to analyst estimates for Snap should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.74% higher. Snap is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Snap has a Forward P/E ratio of 9.26 right now. This signifies a discount in comparison to the average Forward P/E of 19.27 for its industry.

Also, we should mention that SNAP has a PEG ratio of 0.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 1.09 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 148, positioning it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. 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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