Here's Why Snap Stock Lost 30% of Its Value in August

Core Viewpoint - Snap's stock has significantly declined due to slower-than-expected revenue growth and challenges in monetization despite a growing user base [1][4]. Group 1: Financial Performance - Snap's Q2 2024 revenue increased by 16% year over year, exceeding $1.2 billion, but Q3 revenue growth is projected to be only 12% to 16% [1]. - The company reported a drop in effective cost per mille (eCPM) by 3% in Q2 after an 8% increase in Q1, indicating challenges in monetization [2]. Group 2: User Base and Demand - Snap has over 850 million monthly users, which has increased ad volume, but the platform is not attracting the expected level of advertising demand [3]. - Despite the growth in user base, Snap's monetization rates are not on par with other advertising businesses, raising concerns among investors [4]. Group 3: Investment Considerations - Snap's stock is currently trading at under three times sales, making it relatively cheap compared to historical valuations [4]. - The company reported a net loss of over $500 million in the first half of 2024 and a free cash flow loss of almost $36 million during the same period, indicating ongoing financial challenges [4][5]. - Given the slowing growth and persistent losses, it may be prudent for investors to wait for clearer signs of improvement before considering an investment in Snap [5].