Top investors say Snap Inc. (SNAP) ticks everything they need

Snap Inc. (NYSE: SNAP) stock fell -0.83% on Friday to $9.55 against a previous-day closing price of $9.63. With 119.17 million shares changed hands, the volume of the stock remained heavier than its average volume of 52.45 million shares. During the session, the Internet Content & Information company that operates in wider Communication Services sector, reached to the highest price of $9.84 whereas the lowest price it dropped to was $9.38. The 52-week range on SNAP shows that it touched its highest point at $83.34 and its lowest point at $9.63 during that stretch. It currently has a 1-year price target of $18.18. Beta for the stock currently stands at 1.27.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SNAP was down-trending over the past week, with a drop of -38.43%, but this was down by -34.41% over a month. Three-month performance dropped to -66.71% while six-month performance fell -68.85%. The stock lost -87.09% in the past year, while it has lost -79.69% so far this year. A look at the trailing 12-month EPS for SNAP yields -0.51 with Next year EPS estimates of 0.53. For the next quarter, that number is 0.03. This implies an EPS growth rate of 51.80% for this year and 195.51% for next year. EPS is expected to grow by 20.97% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 6.80%.

Float and Shares Shorts:

At present, 1.63 billion SNAP shares are outstanding with a float of 1.25 billion shares on hand for trading. On Apr 28, 2022, short shares totaled 57.68 million, which was 3.52% higher than short shares on Mar 30, 2022. In addition to Mr. Evan Spiegel as the firm’s Co-Founder, CEO & Director, Mr. Robert Murphy serves as its Co-Founder, CTO & Director.

Institutional Ownership:

Through their ownership of 65.27% of SNAP’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 38.25% of SNAP, in contrast to 27.76% held by mutual funds. Shares owned by individuals account for 11.65%. As the largest shareholder in SNAP with 8.73% of the stake, T. Rowe Price Associates, Inc. holds 120,691,946 shares worth 120,691,946. A second-largest stockholder of SNAP, Edgewood Management LLC, holds 79,851,942 shares, controlling over 5.78% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in SNAP, holding 65,265,212 shares or 4.72% stake. With a 3.15% stake in SNAP, the Advisors Inner Circle – Edgewood is the largest stakeholder. A total of 43,525,296 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.21% of SNAP stock, is the second-largest Mutual Fund holder. It holds 30,501,033 shares valued at 400.48 million. T Rowe Price Blue Chip Growth Fun holds 1.81% of the stake in SNAP, owning 24,949,068 shares worth 327.58 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SNAP since 41 analysts follow the stock currently. There are 12 analysts who recommend BUY ratings, while 3 suggest SELL ratings. Of the remaining analysts, 23 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SNAP analysts setting a high price target of $35.00 and a low target of $8.00, the average target price over the next 12 months is $15.18. Based on these targets, SNAP could surge 266.49% to reach the target high and fall by -16.23% to reach the target low. Reaching the average price target will result in a growth of 58.95% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SNAP will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of -$0.49 being high and -$0.99 being low. For SNAP, this leads to a yearly average estimate of -$0.82. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Snap Inc. surprised analysts by -$0.05 when it reported -$0.26 EPS against a consensus estimate of -$0.21. The surprise factor in the prior quarter was -$0.05. Based on analyst estimates, the high estimate for the next quarter is $0.05 and the low estimate is -$0.31. The average estimate for the next quarter is thus -$0.22.

Summary of Insider Activity:

Insiders traded SNAP stock several times over the past three months with 7 Buys and 15 Sells. In these transactions, 473,209 shares were bought while 477,484 shares were sold. The number of buy transactions has increased to 19 while that of sell transactions has risen to 160 over the past year. The total number of shares bought during that period was 1,350,367 while 10,226,759 shares were sold.

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