Snap (NYSE:SNAP) Shares Down 4.7% – Should You Sell?

Snap Inc. (NYSE:SNAP)’s share price fell 4.7% on Wednesday . The stock traded as low as $4.74 and last traded at $4.9150. Approximately 14,553,863 shares were traded during mid-day trading, a decline of 71% from the average daily volume of 50,565,348 shares. The stock had previously closed at $5.16.

Key Stories Impacting Snap

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Snap is continuing to expand its augmented reality ecosystem, including the launch of SPECs glasses and new developer opportunities that could support longer-term platform engagement.
• Positive Sentiment: The company also bought Illumix to strengthen its AR capabilities, reinforcing management’s commitment to AR as a growth area.
• Neutral Sentiment: Trading activity included elevated call option interest, suggesting some investors are still positioning for a rebound despite the recent selloff.
• Negative Sentiment: Insider Ajit Mohan sold 6,923 shares, though the filing said the sale was made to cover tax withholding obligations tied to equity vesting, which makes it less concerning than a discretionary sale.

Analyst Upgrades and Downgrades

Several equities analysts have recently issued reports on the stock. Rosenblatt Securities reaffirmed a “neutral” rating and issued a $6.40 price objective on shares of Snap in a research note on Thursday, April 16th. Citigroup reissued a “market perform” rating on shares of Snap in a research note on Wednesday. TD Cowen started coverage on shares of Snap in a report on Monday, April 27th. They set a “buy” rating for the company. Stifel Nicolaus lifted their target price on Snap from $4.50 to $5.25 and gave the stock a “hold” rating in a report on Tuesday, April 21st. Finally, KeyCorp raised Snap from a “sector weight” rating to an “overweight” rating in a research report on Monday, April 27th. One research analyst has rated the stock with a Strong Buy rating, nine have assigned a Buy rating, twenty-three have assigned a Hold rating and two have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Snap currently has a consensus rating of “Hold” and an average target price of $7.79.

Snap Stock Performance

The company has a debt-to-equity ratio of 1.67, a current ratio of 3.53 and a quick ratio of 3.53. The firm has a market capitalization of $7.85 billion, a price-to-earnings ratio of -19.38 and a beta of 1.03. The firm’s fifty day moving average is $5.64 and its 200 day moving average is $6.08.

Snap (NYSE:SNAP) last released its quarterly earnings data on Wednesday, May 6th. The company reported ($0.05) earnings per share for the quarter, missing the consensus estimate of $0.09 by ($0.14). Snap had a negative net margin of 6.72% and a negative return on equity of 18.92%. The company had revenue of $1.53 billion during the quarter, compared to analyst estimates of $1.53 billion. During the same quarter in the prior year, the company posted ($0.08) EPS. The firm’s quarterly revenue was up 12.2% compared to the same quarter last year. On average, analysts predict that Snap Inc. will post -0.06 EPS for the current fiscal year.

Insider Activity

In other Snap news, insider Ajit Mohan sold 6,923 shares of the business’s stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $5.58, for a total value of $38,630.34. Following the transaction, the insider owned 5,050,968 shares in the company, valued at $28,184,401.44. The trade was a 0.14% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, General Counsel Zachary M. Briers sold 11,958 shares of the company’s stock in a transaction dated Thursday, June 4th. The stock was sold at an average price of $6.00, for a total value of $71,748.00. Following the completion of the transaction, the general counsel directly owned 2,560,835 shares in the company, valued at approximately $15,365,010. The trade was a 0.46% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 2,907,554 shares of company stock valued at $16,093,619. 22.68% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of SNAP. Alyeska Investment Group L.P. acquired a new stake in shares of Snap in the third quarter worth about $176,697,000. AQR Capital Management LLC increased its holdings in shares of Snap by 874.3% during the 4th quarter. AQR Capital Management LLC now owns 10,066,852 shares of the company’s stock valued at $81,239,000 after acquiring an additional 9,033,644 shares during the last quarter. Empyrean Capital Partners LP bought a new position in shares of Snap in the 1st quarter valued at approximately $25,300,000. Junto Capital Management LP bought a new position in shares of Snap in the 3rd quarter valued at approximately $29,071,000. Finally, Voloridge Investment Management LLC lifted its holdings in Snap by 53.3% in the 3rd quarter. Voloridge Investment Management LLC now owns 10,300,911 shares of the company’s stock worth $79,420,000 after purchasing an additional 3,582,223 shares during the last quarter. Institutional investors and hedge funds own 47.52% of the company’s stock.

Snap Company Profile

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.