The SNAP Report

This newsletter outlines a stock analysis for Snap Inc. (SNAP), the parent company of the social media platform Snapchat.

Fundamental Analysis

Snap's most recent financial results for Q2 2025 painted a mixed picture for investors. While the company's Daily Active Users (DAU) grew by 9% year-over-year to 469 million and revenue increased by 9%, it also reported a wider net loss of $263 million. The company noted a slowdown in advertising revenue growth, in part due to an issue with its ad platform. While Snap has shown strong user growth and an increase in free cash flow, its profitability remains a key concern for investors. The company's focus on its subscription service, Snapchat+, and new advertising features like Sponsored Snaps could be key drivers for future revenue growth.

Technical Analysis

Snap's stock is currently in a downtrend. Following its Q2 earnings report, the stock experienced a sharp drop of over 17% in a single day, and it continues to be volatile. The stock is trading near its 52-week low, and its recent price action suggests ongoing bearish sentiment. The company's stock has a history of sharp declines following disappointing news, making it a high-risk investment.

Big News

• Q2 2025 Earnings: The most significant news for Snap was its mixed Q2 2025 earnings report. The revenue growth was modest, and the company posted a larger net loss, which was a major factor in the stock's recent decline.

• Class Action Lawsuit: Multiple law firms have announced class action lawsuits on behalf of investors who suffered significant losses following the Q2 earnings report, alleging that the company misled investors about its advertising revenue growth.

• New Senior Notes Offering: Snap announced a private offering of $550 million in senior notes, with the proceeds intended to be used to repurchase existing debt. This move aims to manage the company's debt load and improve its balance sheet.

• New Products & Features: The company continues to push new features, including a new subscription tier, Lens+, and announced plans to launch consumer-ready AR glasses in 2026.

Expert Recommendations and Forecast

The consensus among analysts for Snap is a "Hold." While some analysts maintain "Buy" ratings, the majority of the 43 analysts who cover the stock have a neutral outlook. The average 12-month price target is approximately $9.28, which suggests a potential upside, but this is a wide range with a low of $7.00 and a high of $16.00, reflecting the uncertainty surrounding the company.

Earnings and Outlook

Snap's next earnings report, for the third quarter, is estimated to be on Tuesday, October 28, 2025. This report will be crucial for investors to see if the company's new ad features and strategic initiatives can reverse the recent decline in advertising revenue growth.