by Ian Harvey
February 12, 2021
Shares of Snap Inc stock recently slipped after the company followed up its strong fourth-quarter earnings report with mixed guidance for the year ahead – providing a buying opportunity.
Meanwhile, Weekly Options Traders have seen their trade that they executed on Monday, February 08, jump to 75% potential profits in 15 minutes, or 207% in 24 hours.
The stock has pulled back again after these gains and is hovering around the $62 mark.
Shares of Snap Inc, the parent company of Snapchat, recently slipped after the company followed up its strong fourth-quarter earnings report with mixed guidance for the year ahead.
Snap Inc. stock slumped 10% in extended trading Thursday after the social-media company announced mixed results but warned a change in Apple Inc.’s forthcoming operating system could present a risk for advertising.
Snap Inc stock reported a net loss of $113.1 million, or 8 cents a share, against expectations of a loss of 7 cents a share. Snap’s revenue soared 62% to $911 million, beating estimates of $852 million.
The company did announce an adjusted quarterly profit of 9 cents a share, and achieved its goal of adjusted EBITDA profit ($45 million) in fiscal 2020. Analysts had expected an adjusted profit of 7 cents a share in Q4. Snap Inc stock also announced its first-ever investor day on Feb. 23.
“As the global health crisis is addressed and the world begins to reopen, we see opportunities to help strengthen the bonds of the Snapchat community all over the world,” Snap Chief Executive Evan Spiegel said in a statement announcing the results.
Sparked by October’s unexpectedly strong earnings report, Snap shares have spiked 243% over the past 12 months. The S&P 500 index is up 16% over the past year.
Snap Inc Stock Reports Earnings…..
Snap Inc shares slumped 10% in extended trading last Thursday after the social-media company announced mixed results but warned a change in Apple Inc.’s forthcoming operating system could present a risk for advertising.
Snap SNAP reported a net loss of $113.1 million, or 8 cents a share, against expectations of a loss of 7 cents a share. Snap’s revenue soared 62% to $911 million, beating estimates of $852 million.
Snap reported daily active users jumped 22% to 265 million, compared to the 257.8 million forecast.
The Catalysts Behind The Trade…..Read the full recommendation HERE…..
1. Ad Revenue.....
Snap Inc stock benefited from a surge in digital ad revenue.
“[Snap’s] ad revenue growth continued strongly, and we are especially enthused by the growth in daily active users, which happened in all of Snap’s regions, including North America and Europe, where TikTok has come on strong,” eMarketer analyst Debra Aho Williamson said.
Snap offered first-quarter revenue guidance of $720 million to $740 million, compared to the $700 million estimated by analysts.
2. Gen Z's favorite platform.....
Snapchat continues to grow in Facebook's shadow because it remains more popular with Gen Z users. In Piper Jaffray's latest "Taking Stock with Teens" survey, 34% of U.S. teens chose Snapchat as their favorite social media platform -- putting it ahead of ByteDance's TikTok (29%) and Facebook's Instagram (25%).
3. Overseas Users.....
Snapchat is also gaining momentum overseas. Its DAUs grew just 6% year over year to 92 million in North America last quarter, but rose 10% to 74 million in Europe and jumped 55% to 99 million across the rest of the world.
Snap doesn't disclosed its user growth in each country, but it's repeatedly cited India -- which banned TikTok last year -- as a major growth market.
4. Expanding AR Ecosystem.....
Over 200 million DAUs use Snap's AR features, which include its filters, label-scanning tools, and landmark-enhancement tools. That ecosystem is self-sufficient and growing, since it encourages users and advertisers to create their own AR tools with its Snap Kit.
5. Video Usage.....
Over 90% of the Gen Z population in the U.S. watched Snapchat's shows and publisher content in the fourth quarter. Older users (over the age of 35) also spent more than 30% more time year over year engaging with that content each day.
The stickiness of Snap's AR and video ecosystems, which enable it to display more ads per user, boosted its global ARPU (average revenue per user) 33% year over year to $3.44 during the fourth quarter, which marked its strongest growth in five quarters.
6. Video Games.....
Snap Inc stock launched Snap Games, a platform for in-app video games, nearly two years ago. Last June, Snap declared that over 100 million users have played its games -- and that number likely rose throughout the pandemic as developers rolled out more games. The growth of that ecosystem, which encourages users to play as their own Bitmojis and socialize with other users, should further boost its ARPU.
7. eCPM Growth.....
Snap's eCPM (effective cost per thousand impressions, or the average cost of Snap's ads) rose 46% year over year during the fourth quarter, marking an acceleration from its 20% growth in the third quarter.
Snap's eCPM is rising because it's selling a higher mix of pricier video ads. That growth indicates Snap still enjoys plenty of pricing power against Facebook, Twitter, and other platforms, since advertisers still covet its loyal base of Gen Z and millennial users.
The Actual Recommended Trade
** OPTION TRADE: Buy SNAP FEB 12 2021 65.000 CALLS at approximately $1.50 (bought for $0.59)
Snap Inc Stock Profit Explained…..
“Weekly Options Members” entered a Snap Inc stock trade on Monday, February 08, 2021 for $0.59 at 9:56 am, and if sold 15 minutes later, at 10:11 am, there was a potential profit of 75%.
If the trade was held until Tuesday morning a potential profit of 207% was for the taking!
Excellent profit from Snap Inc stock within a short period of time!
Moving Forward for Snap Inc Stock…..
Analysts expect Snap's revenue to rise 44% in fiscal 2021. Snap trades at about 20 times next year's sales -- which still makes it cheaper than many other high-growth tech stocks.
Will Snap Inc Stock Recover Quickly?
Will We Recommend Another Future Snap Inc Stock Trade?
What Other Trades Are We Anticipating?
Do You Wish To Be Part Of This Action?
Join us here at Stock Options Made Easy, and find out our trades moving forward.
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!