Why Snap Stock Is Plunging Today

Snap Inc SNAP shares are trading lower Friday morning after the company reported worse-than-expected financial results, announced a reduction in its hiring rate and refrained from providing guidance. Several analysts also downgraded the stock following the report.

Snap said second-quarter revenue increased 13% year-over-year to $1.11 billion, which missed the estimate of $1.14 billion, according to data from Benzinga Pro. The social media company reported a quarterly loss of 2 cents per share, which missed the estimate for a loss of 1 cent per share. Daily active users increased 18% year-over-year to 347 million.

Given uncertainties related to the operating environment, Snap did not provide third-quarter revenue or adjusted EBITDA guidance. The company's board authorized a $500 million stock repurchase program. 

Related Link: Snap Q2 Earnings Highlights: Stock Tanks On No Q3 Guidance, Revenue And EPS Miss

Analyst Assessment:

• Goldman Sachs analyst Eric Sheridan downgraded Snap from a Buy rating to Neutral and lowered the price target from $25 to $12.
• Stifel analyst Mark Kelley downgraded Snap from a Buy rating to Hold and lowered the price target from $20 to $14.
• Piper Sandler analyst Thomas Champion maintained Snap with a Neutral rating and lowered the price target from $18 to $11.
• Credit Suisse analyst Stephen Ju maintained Snap with a Outperform rating and lowered the price target from $45 to $35.
• Citigroup analyst Ronald Josey maintained Snap with a Buy rating and lowered the price target from $29 to $16.
• RBC Capital analyst Brad Erickson maintained Snap with a Sector Perform rating and lowered the price target from $17 to $10.

SNAP Price Action: Snap shares are making new 52-week lows on Friday.

The stock was down 32.0% at $11.11 at press time.

Photo: Souvik Banerjee from Pixabay.