Down 88% From Its All-Time High, Here's 1 Big Reason Snap Stock Can Snap Back in 2025

Core Insights - Snap's stock has experienced a significant decline of 88% from its peak value, primarily due to privacy changes by Apple that affected its advertising effectiveness [2][5] - The company is showing signs of recovery, with improvements in its advertising technology and a growing user base [6][10] Group 1: Stock Performance - Snap's stock reached an all-time high of $83 in September 2021, representing a 388% gain from its IPO price of $17 [1] - Following the peak, Snap's stock has lost 88% of its value, indicating substantial volatility [2] Group 2: Advertising Challenges - Apple's privacy changes in 2021 required app developers to obtain user consent for tracking, which negatively impacted Snap's ability to sell targeted ads [4][5] - Meta Platforms adapted quickly to these changes, while Snap was slower but has made significant progress with a new machine learning-powered advertising engine [6] Group 3: Revenue Trends - Snap's annual revenue grew by 64% in 2021 but fell to 12% in 2022 and less than 1% in 2023 [8] - In 2024, Snap achieved record revenue of $5.4 billion, reflecting a growth rate of 16% [9] Group 4: User Engagement - As of the end of Q1 2025, Snapchat had 460 million daily active users, a 9% increase year over year, indicating strong user engagement [10] - The platform has gained approximately 140 million more daily users since the end of 2021, enhancing its attractiveness to advertisers [12] Group 5: Valuation and Investment Potential - Snap's current price-to-sales ratio is 2.8, near its lowest level since going public in 2017, suggesting a potentially undervalued stock [13] - If Snap successfully addresses its advertising challenges, it could lead to increased investor confidence and higher valuations in the future [15]