1 Stock Down 18% to Buy and Hold for 10 Years

Core Viewpoint - Despite recent stock market challenges and an 18% decline in shares since January, Snap's long-term prospects remain attractive due to improving financial metrics and user engagement strategies [1][10]. Financial Performance - Snap reported a revenue of $1.6 billion in Q4 2024, marking a 14$9 million in Q4 2024, a significant turnaround from a net loss of $248 million in Q4 2023 [3] - Adjusted EBITDA for the same period was$276 million, reflecting a 73% increase compared to the previous year [3] - Free cash flow also showed improvement, indicating a positive trend in financial health [4] User Engagement and Growth - Daily active users (DAUs) increased by 9% year-over-year to 453 million in Q4 2024 [5] - The introduction of engaging features, such as the AI-powered "Me in the 60's," which garnered over 900 million views, has contributed to user engagement [6] - Snap's smartphone penetration in North America is only 22%, suggesting significant room for growth in monthly active users (MAUs) [8] Revenue Diversification - Snap has been diversifying its revenue streams, with "other revenue" growing by 131% year-over-year in 2024, primarily driven by the Snapchat+ subscription service [7] - The annual run rate for Snapchat+ has exceeded $500 million, providing a steady revenue source [7] Future Outlook - Snap aims to enhance its position in augmented reality (AR) and continues to invest in AI-driven features to boost engagement [8] - As Snap expands its MAUs and introduces new features, ad revenue and subscriptions are expected to grow significantly, leading to improved profitability [9] - The current stock decline presents a potential opportunity for long-term investors, as Snap's diversified revenue base and innovative features may lead to stronger returns in the future [10]