CoinStats - Snap stock tanks 30% on Q4 earnings: What's next for SNAP?

Snap Inc stock plummets after disappointing Q4 revenue due in part to Israel-Hamas conflict, weak future guidance, and planned layoffs.

Snap Inc (NYSE: SNAP) is experiencing a significant drop in its stock price during after-hours trading on Tuesday due to disappointing revenue for its fiscal fourth quarter, partly attributed to the ongoing Israel-Hamas war. The stock is also being negatively affected by the company's conservative guidance for the future, with Snap now predicting revenue to range between $1.095 billion and $1.135 billion in the current financial quarter, below analysts' expectations of $1.117 billion.

Evan Spiegel, the CEO of Snap Inc, expressed in a recent press release that Snapchat's unique value proposition of enhancing relationships with friends, family, and the world has laid a strong foundation for long-term business growth.

Earlier this week, Snap announced plans to reduce its workforce by approximately 10%, as reported by Invezz. Despite this, the company's stock has seen a nearly 15% increase from its year-to-date low.

In the fourth quarter, Snap added 2.0 million new subscribers to its premium service, Snapchat+, bringing the total number of subscribers to 7.0 million. CEO Spiegel also noted the progress made with the company's ad platform and the improved results for advertising partners.

However, the company fell short of revenue estimates, generating $3.29 in average revenue per user in the fourth quarter. Snap expects a continued increase in daily active users to 420 million in the current quarter, slightly higher than the expected 419.3 million.

Snap's letter to shareholders outlined three key initiatives for long-term success, including the evolution of ML models, unifying the content experience across Spotlight and Stories, and focusing on user growth and engagement.

Despite these initiatives, Snap forecasts an adjusted EBIT loss of up to $95 million in Q1, significantly higher than the $21.9 million predicted by analysts. Currently, Wall Street has a consensus "hold" rating on Snap stock.