Published: Wed, February 07, 2018
Hi-Tech | By Cory Rios

Snapchat Stock Soars on Revenue Gains

Snapchat Stock Soars on Revenue Gains

Snap stock is down over 43 percent since its first day of trading in early March and the company looks a lot more like the next Twitter than it does the next Facebook. Snap added almost 9 million daily active users in the last quarter, the most since the third quarter of 2016, pumping its daily user base to 187 million.

Snap shares soared by about 20 percent Tuesday on the strength of its unexpectedly upbeat quarterly report.

Instagram is also wildly popular with young mobile users. That indicates that Snap CEO Evan Spiegel's redesign of the Snapchat app, unveiled back in November and still in the progress of rolling out worldwide, may be helping the company reclaim some of its early-stage popularity surges that were damaged, in part, by Facebook's launch of Instagram Stories. Then, the company fell out of favor on Wall Street, hit by a slew of analyst downgrades. Analysts had expected $252.9 million in revenue for the quarter.

"Our business really came together towards the end of past year and I am very proud of our team for working hard to deliver these results", said Snapchat CEO Evan Spiegel in prepared remarks to Tuesday's earnings call. Vetr raised Snap from a "strong sell" rating to a "hold" rating and set a $16.13 target price for the company in a report on Friday, October 13th. Ever since the company behind Snapchat publicly unveiled paperwork with plans for a $20 billion IPO nearly exactly a year ago, concerns have surfaced about Snap's long-term viability. Snap Inc (SNAP) management said the Q4 2017 result was the best quarter for user adds since Q3 2016.

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However, three months later, that redesign has still not rolled out widely, and investors will be looking for answers as to what's taking so long. Further, the company is not profitable and its advertising business has not yet matured.

The ephemeral messaging app sccessfully wooed more advertisers in the fourth quarter as it became easier to place ads through its still-nascent automated platform, according to Aaron Goldman, chief marketing officer at 4C, which plugs into Snapchat to deliver ads.

Snapchat's parent company, easily just posted its best quarter since going public a year ago, blowing past revenue and user growth estimates when the company reported its Q4 earnings on Tuesday.

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