Where Will Snap Stock Be In 1 Year?

Core Viewpoint - Snap has faced significant challenges over the past year, resulting in a substantial decline in its stock value, but there are signs of stabilization and potential growth in the near future [2][3][11]. Company Performance - Snap's stock has lost over 43% of its value in the past 12 months, trading 45% below its IPO price and nearly 89% below its all-time high due to slowing ad sales and increased competition [2][3]. - The company reported a flat revenue growth in 2023 after previous increases of 64% in 2021 and 12% in 2022, primarily due to Apple's iOS update, competition from TikTok and Instagram, and a challenging macroeconomic environment [5][6]. - In 2024, Snap's revenue rose by 16%, driven by growth in daily active users (DAUs) and improvements in average revenue per user (ARPU) in North America [7]. User Metrics - Snap has 460 million daily active users, but growth in North America has stagnated while overseas markets have shown stronger growth [3][6]. - DAU growth is projected to be 10% in Q1 2024, tapering to 9% in subsequent quarters, while ARPU growth is expected to decline from 10% in Q1 2024 to 5% by Q1 2025 [8]. Financial Metrics - Snap's operating margin remains negative but has improved year over year, with an adjusted EBITDA margin doubling to 8% in Q1 2025 [9][10]. - The operating margin is projected to improve from (28%) in Q1 2024 to (2%) in Q4 2024, while the adjusted EBITDA margin is expected to rise from 4% in Q1 2024 to 18% in Q4 2024 [10]. Future Outlook - Snap did not provide guidance for Q2 2024 due to uncertainties related to ad sales from Chinese e-commerce companies and broader trade headwinds affecting the advertising market [11]. - Analysts expect Snap's revenue to grow by 9% in 2025 and 11% in 2026, with adjusted EBITDA growth projected at 6% in 2025 and accelerating to 45% in 2026 [12]. - With an enterprise value of $15.6 billion, Snap's stock is considered reasonably valued, with potential for a 45% increase over the next 12 months if it meets expectations [13].