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Snap (SNAP) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Snap (SNAP) closed at $19.25, marking a +0.79% move from the previous day. This change outpaced the S&P 500's 0.11% gain on the day. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq added 0.2%.

Coming into today, shares of the company behind Snapchat had gained 22.36% in the past month. In that same time, the Computer and Technology sector gained 6.56%, while the S&P 500 gained 3.25%.

SNAP will be looking to display strength as it nears its next earnings release, which is expected to be February 4, 2020. The company is expected to report EPS of $0, up 100% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $560.39 million, up 43.75% from the year-ago period.

Investors should also note any recent changes to analyst estimates for SNAP. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.26% lower within the past month. SNAP currently has a Zacks Rank of #3 (Hold).

Digging into valuation, SNAP currently has a Forward P/E ratio of 859.5. This valuation marks a premium compared to its industry's average Forward P/E of 58.24.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 103, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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