SNAP
Snap Cuts 1000 Jobs, Stock Pops 6%
Article Summary
HOLD- Snap Inc. (NYSE: SNAP) surged 6% after announcing it plans to lay off about 1,000 workers as part of a broader pivot to AI, with Snapchat projecting $500 million in annualized savings as it pushes for profitability.
- The job cuts come as Snap faces pressure from activist investor Irenic Capital Management, which owns about 2.5% of the company, and the stock trades at about $5.92 per share, an 80% drop from the original IPO price in 2017.
- The company also plans to launch its augmented reality glasses, Specs, later this year after investing heavily in development, while revenue growth has been mostly flat over the last few quarters.
- Snap updated its forecast to $1.53 billion in revenue for the first quarter, up 12% year-over-year, citing cost-savings driven by the job cuts.
- The stock is down nearly 28% this year, while the company had over 5,000 employees in December, though that number is likely to get continually whittled down.
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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 ? | 27.8% | 20% | 75.0 ptsSignificant Upside (27.8%) - Target: $7.81 vs Current: $6.11 |
| Gross Margin % ? | 52.3% | 15% | 80.0 ptsVery Healthy (52.3%) - High-quality margins |
| Drawdown from 52-Wk High ? | -41.4% | 15% | 80.0 ptsSolid Dip (-41.4%) - 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.