Snap Stock Drops Following Q4 Results And Analyst Downgrade: What's Going On?

Snap Inc. SNAP shares are moving lower Wednesday after the company reported its fourth-quarter financial results. The stock initially rose after the report but reversed course following a downgrade from Wells Fargo.

What To Know: Snap reported earnings of 16 cents per share, beating the analyst consensus estimate of 14 cents. Revenue came in at $1.55 billion, slightly above the $1.54 billion estimate and up from $1.36 billion in the same quarter last year. Snapchat’s daily active users grew 9% year-over-year to 453 million, with over one billion Snaps shared publicly each month. CEO Evan Spiegel highlighted the company's progress in growing its user base and improving advertiser performance, with active advertisers more than doubling in the quarter.

Despite the earnings beat, Wells Fargo downgraded Snap from Overweight to Equal-Weight and cut its price target from $15 to $11. Other analysts issued mixed reactions. BofA Securities and Citigroup raised their price targets slightly to $14.50 and $13.50, respectively, while JPMorgan lowered its target from $11 to $10. Susquehanna maintained a Neutral rating but raised its target to $13.

Following the earnings release, Snap shares initially surged 12.16% after hours to $13.01. However, by Wednesday, the stock was down as the market reacted to the downgrade and analyst revisions.

SNAP Price Action: Snap shares were down 7.00% at $10.77 at the time of writing, according to Benzinga Pro.

Read Next:

• Uber Stock Is Down Despite Reporting ‘Strongest Quarter Ever’: Here’s Why Investors Are Tapping The Brakes
  

Image Via Shutterstock.