SNAP
Snap to Cut 16% of Its Workforce in Quest for Profitability
Article Summary
HOLD- Snap Inc. (NYSE: SNAP) is laying off roughly 1,000 full-time employees, or 16% of its global workforce, as part of an effort by Chief Executive Officer Evan Spiegel to reduce costs and achieve profitability.
- Spiegel cited improvements in artificial intelligence technology that let Snap employees move more quickly, while Snapchat is also closing more than 300 open roles.
- The job cuts and pullback on hiring will reduce Snap's annualized cost base by more than $500 million by the second half of this year, according to Spiegel.
- Snap estimated total revenue rose 12% to $1.53 billion in the first quarter, while adjusted earnings before interest, taxes, depreciation and amortization came in at approximately $233 million during the period.
- Snapchat's stock is down almost 31% so far this year as the company faces challenges to user growth including efforts by lawmakers and regulators around the world to enforce social media bans for teens.
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Growth Stock Scoring Breakdown
| METRIC | VALUE | WEIGHT | ANALYSIS |
|---|---|---|---|
| Sales Growth TTM ? | 10.6% | 25% | 50.0 ptsMeets Minimum (10.6%) - Passes screener |
| EPS Growth Next 5Y ? | 0.0% | 25% | 10.0 ptsVery Weak (0.0%) - Minimal expectations |
| Target Price Upside ? | 29.8% | 20% | 75.0 ptsSignificant Upside (29.8%) - Target: $7.75 vs Current: $5.97 |
| Gross Margin % ? | 52.3% | 15% | 80.0 ptsVery Healthy (52.3%) - High-quality margins |
| Drawdown from 52-Wk High ? | -42.6% | 15% | 80.0 ptsSolid Dip (-42.6%) - Good entry zone |
Disclaimer: This rating is for informational purposes only and is not financial advice.
All data sourced from Finviz.
Always conduct your own research and consult with a financial advisor before making investment decisions.
Past performance does not guarantee future results.
About SNAP
- Snap Inc. operates as a technology company in North America, Europe, and internationally.
- The company offers Snapchat, a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight that enable people to communicate visually through short videos and snaps.
- It also provides Snapchat+, Lens+, and Snapchat Platinum, a subscription service that provides subscribers access to exclusive, experimental, and pre-release features; Spectacles, an augmented reality (AR) glasses; and advertising products, including AR ads and Snap ads comprises a single image or video ads, collection ads, dynamic ads, story ads, commercials, sponsored snaps, and promoted places.
- In addition, the company offers campaign management and delivery, an advertising platform that provides automated, sophisticated, and scalable ad buying and campaign management; and measuring advertising effectiveness solutions.
- The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016.
- Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.