Why Did Snapchat's Stock Drop 24% After Hours?

TL;DR

Snapchat's stock fell by 24% after its latest earnings report missed expectations, despite impressive revenue growth of 286% year-over-year. The company increased its daily active users by 36%, but it continues to incur significant losses and raised concerns about its profitability moving forward.

Transcript

holy smokers guys Snapchat is down massively massively after hours so we got to talk about Snapchat we got to look at these numbers that came out of Snapchat and uh we got to see about Snapchat here I also want to talk a little bit about Nidia Nvidia I'm sorry I I don't think I pronounce it correctly all the time it's Nvidia um we got to look at th... Read More

Key Insights

• 🪡 Snapchat's IPO performance, compared to Facebook's early stock price, indicates that Snapchat would need to decrease significantly to have a similar performance.
• ✋ Value investors typically avoid IPOs due to the high prices and management's focus on obtaining top dollar for the company.
• 🙂 Snapchat's revenue growth is impressive, but it fell slightly short of expectations, and the company is currently losing more money.
• 💪 Snapchat's balance sheet is strong, with over $3.2 billion in cash and no long-term debt.
• 👤 Daily active users are a crucial metric for social media companies, and Snapchat's growth in this area is promising.
• 👤 Despite having a smaller user base than Facebook, Snapchat's valuation should be considered in comparison.
• 👤 Snapchat's average revenue per user and hosting costs per user are increasing, indicating the need for continued revenue growth to offset expenses.

Questions & Answers

Q: Why did Snapchat's stock plummet after hours?

Snapchat's stock saw a significant drop due to disappointing revenue results, despite still showing remarkable revenue growth.

Q: What was the growth in daily active users for Snapchat?

Daily active users for Snapchat increased by 36% year-over-year, demonstrating strong user engagement and growth.

Q: What contributed to Nvidia's success?

Nvidia's impressive earnings were driven by their data center GPU business and prospects in the field of artificial intelligence.

Q: How did Nvidia's stock perform in after-hours trading?

Nvidia had a substantial increase of $18 per share in after-hours trading, showing the market's positive response to their earnings report.

Summary & Key Takeaways

• Snapchat's stock drops by 24% after disappointing revenue results, although they still show significant revenue growth.

• Daily active users for Snapchat increased by 36% year-over-year, indicating strong user engagement.

• Nvidia reports impressive earnings, with a 48% increase in revenue and 126% increase in EPS, driven by their data center GPU business and prospects in artificial intelligence.