Snap Earnings: Shares Soar, Then Dip, After Q2 Beat

Oh, Snap.

Shares of the parent of Snapchat initially soared 11% in extended trading before slipping Tuesday after reporting fiscal second-quarter earnings that beat analyst estimates.

Snap narrowed adjusted losses to 14 cents per share on a 44% hike in revenue to $262.3 million.

Analysts, on average, had expected an adjusted a loss of 18 cents per share on revenue of $249.8 million.

The Los Angeles-based company's daily active users grew 8% year-over-year to 188 million, shy of the 193 million forecast by analysts. But the closely followed average revenue per user increased to $1.40 from $1.05 in the same quarter a year ago.


Tim Warner/Getty Images

"We are excited by the progress we have been making and are optimistic about the opportunities ahead as we continue to invest in innovation," Evan Spiegel, Snap's chief executive, said in a statement.

Snap (SNAP) has lagged behind its social media brethren this year while waiting for its retooled design to resonate with consumers. Its shares are down nearly 10% for the year, as of Tuesday morning, while Facebook (FB) stock is up 5% despite a quarterly bloodbath last month.

Skepticism heading into Snap's better-than-expected results was highlighted by Wall Street's reaction to Snap's five quarterly reports since its March 2017 initial public offering: Shares responded positively only once. On two occasions, they plunged more than 20% after results were announced.

"We believe the market has trained itself to approach each quarterly result with a heavy dose of caution as Snap remains a'show me' stock," Moness Crespi Hardt analyst Brian White wrote in a recent note.

Of 35 analysts following Snap, six have recommendations of Buy, 18 Hold, and 11 Sell. Their average price target is $12. Shares closed at $13.12, up 7 cents, for the regular session. They are now up 6.71% to $14.00 in late trading.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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