Social network Snapchat (NYSE: SNAP) will be reporting earnings this Wednesday afternoon. Here’s what investors should know.
Snap beat analysts’ revenue expectations last quarter, reporting revenues of $1.72 billion, up 10.2% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ EBITDA estimates and a narrow beat of analysts’ revenue estimates. It reported 474 million daily active users, up 4.6% year on year.
Is Snap a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Snap’s revenue to grow 12.1% year on year, slowing from the 14.1% increase it recorded in the same quarter last year.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Snap has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Snap’s peers in the social networking segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Reddit delivered year-on-year revenue growth of 69.1%, beating analysts’ expectations by 8.8%, and Pinterest reported revenues up 17.8%, topping estimates by 4.4%. Reddit traded up 12.5% following the results.
Read our full analysis of Reddit’s results here and Pinterest’s results here.
There has been positive sentiment among investors in the social networking segment, with share prices up 11.1% on average over the last month. Snap is up 31.4% during the same time and is heading into earnings with an average analyst price target of $7.91 (compared to the current share price of $6.19).
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