Snap Shares Sink on Earnings Miss

Ahead of Snap reporting its earnings on Tuesday, JPMorgan said the company could be the next tech company to rise after reporting results this earnings season.

JPMorgan has called Snap the ‘Best Idea’ for the bank and expected the company to report strong user growth and improving margins.

Well on Tuesday after the market closed Snap released results and Wall Street didn’t appear to be happy.

The stock tumbled 14% on the company’s fourth quarter earnings report which fell short of what Wall Street was expecting.

Snap reported a loss of $240.7 million, or 17 cents a share. FactSet estimates were calling for a loss of 12 cents.

Advertising saw record revenue however of $561 million, vs. expectations of $563 million from analysts polled by FactSet.

Average revenue per user was $2.58, shy of the $2.62 forecast by FactSet.

Daily-active users, a key measurement of the company’s popularity also jumped 17% to 218 million. Analysts polled by FactSet had were waiting for 214.74 million.

“The strength in our core business gives us confidence in our long term growth and profitability and we’re excited to build on these results in 2020 and beyond,” said Snap Chief Executive Evan Spiegel.

Looking ahead, Snap has forecast sales of $450 million to $470 million, in line with the $461 million forecast by FactSet in Snap’s fiscal first quarter.

Shares of Snap have gained nearly 170% in the last 12 months.

Disclaimer: We have no position in Walt Disney Co. (NYSE: DIS) and have not been compensated for this article.