Snap Inc. (NYSE:SNAP) is flirting with record highs ahead of its fourth-quarter and full-year earnings report. The social networking company has been on an impressive run, rallying by more than 200%. The rally has come at the back of investors remaining bullish about the company’s long term prospects and growth metrics amid a spike in users in Snapchat.
Earnings Expectations
Wall Street expects the company to report $847.4 million in revenues, indicating a 51.1% year over year growth. The company is also expected to post growth on Daily Active Users. The payment giant reported subscriber growth of 39 million year-over-year and 11 million sequentially in the third quarter. Consensus estimates indicate that SNAP ended the year with over 250 million active users representing 17.9% year over year growth.
Snap is believed to have benefited from a spike in users in the app, a development expected to fuel growth in advertising revenues. In the U.S, the app reaches 90% of people between the ages of 13 and 24 and more than 75% between the ages of 13 and 34. Its penetration levels have helped it become more attractive to advertisers.
Snap Growth
The company has strengthened its social networking app with the addition of innovative features like Lens Studio, Camera Kit, and Snap Mins, all aimed at enhancing engagement levels on the app. The social networking app has especially benefited from its disappearing photo and video sharing app that has become popular than ever. The app has since expanded into a robust entertainment app built for changing consumer habits.
The discover page is also increasingly becoming a key component of Snap's core business. The company has already inked strategic partnerships with the likes of Disney, the NFL, and celebrities for its shows. The feature has also seen a 50% increase in the number of people using it to watch shows
The stock rallying by more than 200% underscores growing investors’ confidence about the company’s ability to attract consumers and advertisers in a quickly-changing entertainment environment. The stock has also outperformed the overall tech industry, affirming strengthening investor confidence about long term prospects.