Can you feel the ground moving beneath your feet? Shares of Snap Inc (NYSE:SNAP) are skyrocketing over 20% in after-hours trading Tuesday, after the social media giant reported fourth-quarter results that beat Street expectations. Specifically, the company reported total revenues and pro forma EPS of $285.7 million and ($0.13) versus street expectations of about $253 million and ($0.16), respectively.
GBH Insights analyst Daniel Ives commented, “This eye popping top-line beat was a “shocker” and was a stark contrast to the overwhelming bear sentiment heading into the 4Q print and speaks to a company with strong growth prospects, albeit clear business challenges ahead to iron out in 2018. After much pain that investors have endured since SNAP went public, this quarter was finally a breath of fresh air that gives new life to the SNAP turnaround story in 2018. That said, SNAP added roughly 9 million users this quarter vs. our expectations for 6 million users bringing the company to 187 million DAUs, which represents roughly 20% year over year growth with a trajectory to exceed 200 million users during the course of 2018. Better than expected ARPU of $1.53 (vs. the Street at $1.36) will be a major focus of 4Q which we believe will grow 30%-35% YoY in 2018, although still a major Achilles heel which is well below industry norms and a front and center strategic focus going forward for Spiegel & Co as part of the app redesign. Overall, this quarter was a major step in the right direction for the company and will be a tough pill to swallow for all the naysayers that threw in the white towel over the last few months.”
Ives reiterates an Attractive rating on Snap shares, while keeping his price target at $17. (To watch Ives’ track record, click here)
Out of the 24 analysts polled by TipRanks (in the past 3 months), 6 rate Snap stock a Buy, 11 rate the stock a Hold and 7 recommend a Sell.