Snap Inc (SNAP) Stock Jukes the Bears! What’s Next?

Advertisement

Snap - Snap Inc (SNAP) Stock Jukes the Bears! What’s Next?

Source: Shutterstock

Snap Inc (NYSE:SNAP) investors are experiencing a wild ride amid chaotic trading on Monday. Currently, SNAP stock is up nearly 6% after trading down nearly 5% near the open.

It has been a painful couple of months after the “camera company” — but more commonly known as the parent to social media outlet Snapchat — hit a post-IPO high of $29.44 in March before cratering some 58%. The Snap offering priced at $17.

Technically, if the bulls can hold the gains in play right now, a “bullish engulfing” candlestick will form — meaning the opening low and closing high completely envelop Friday’s trading range. This is a classic turnaround signal. And it suggests the social media stocks could enjoy its first sustained rally since May.

To be sure, sentiment surrounding SNAP stock could hardly be worse right now.

Analysts at Cantor Fitzgerald lowered their price target to $15 this morning in the wake of an underwhelming earnings report last week. Earnings, revenues and daily active users (DAUs) all missed estimates. A loss of 16 cents per share was 2 cents worse than expected despite a 153% rise in revenues. DAUs grew by 7 million quarter-over-quarter to 173 million, but that fell well short of the 176 million that were expected.

Still, it was a 21% year-over-year rise, which his nothing to sneeze at.

Snap stock chart

Analysts overall had a mixed response to the quarter. Stifel highlighted temporary revenue pressure (from a shift to self-serve API ad platform) and healthy user growth in the face of competitive pressures from Facebook Inc (NASDAQ:FB) — which has been stealing features from Snapchat left and right — and others, maintaining an optimistic outlook. RBC believes its still way too early to write off the company’s strategy.

The company will report its next quarter’s worth of results on Nov. 8 after the close. Analysts are looking for a loss of 14 cents per share on revenues of $246.2 million.

Technically speaking, a simple oversold rebound to the 50-day moving average near $16 would be worth a near 30% gain in SNAP stock from here.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/snap-inc-snap-stock-jukes-the-bears-whats-next/.

©2024 InvestorPlace Media, LLC