I’ll admit I didn’t see the big gains in Snap Inc (NYSE:SNAP) coming. Few did, of course, as evidenced by the 47.5% post-earnings pop in the SNAP stock price.

I’m skeptical those gains will hold, however, and indeed Snap stock already has pulled back 6% from its post-earnings close. Much of the losses came on Tuesday,  a trend that continued early Wednesday, as user frustration with the Snapchat app’s redesign led to a downgrade from Citigroup Inc (NYSE:C).

I wrote back in December that the redesign wouldn’t save Snap stock. Now, it seems possible it will hurt SNAP. But the bigger problem here isn’t the redesign — it’s simply the SNAP stock price.

Fourth-quarter results really were not that good  — and nowhere near good enough to support what remains an enterprise value of about $22 billion. Snap Inc is going to have to drive a lot more growth — and I just don’t think it’s coming.

Snap Redesign Causes Friction

The update to Snapchat was launched back in November, as William White detailed at the time. In an op-ed, Snap CEO Evan Spiegel said the changes were part of Snap’s “separating the social from the media,” and took a swipe at larger rival Facebook Inc (NASDAQ:FB) in saying the existing social media setup had fueled the spread of “fake news.”

There was a financial motive as well. Spiegel said on the Q4 conference call that the redesign “made our application simpler, and easier to use, especially for older users.” In the context of Snapchat, users 35 and up are considered “older,” and Spiegel pointed to “disproportionately higher” usage metrics for those users after the changes. With Snapchat trying to draw more and larger advertisers to its platform, expanding the age demographic seems a wise move.

But the redesign has caused some friction with the existing user base. According to TheStreet, 1.2 million people have signed a petition calling for the redesign to be reversed. Admittedly, that’s not a huge number in the context of Snap’s user base — 187 million daily active users as of the end of 2017. But for a company that has struggled to drive user growth, both the 1 million-plus number and the general discontent raises some concerns.

All that said, there’s a clear risk of overreacting here. Facebook itself has made a number of changes to its algorithm, most recently last month. Its insistence on moving Messenger to a new app back in 2014 led to negative reviews, as White pointed out at the time. Facebook’s growth continued unabated. Twitter Inc (NYSE:TWTR) doubled its character count in November, and then posted a Q4 blowout in February.

A few disgruntled customers — OK, over a million of them — don’t necessarily doom the redesign to failure. As Spiegel himself has said, it takes time to adjust. And while users have threatened to leave Facebook and Twitter over past changes, they rarely followed through. It would seem likely the same happens with the Snapchat redesign.

The Snap Stock Price Is Too High

The problem for Snap stock, however, is that the redesign is not the only problem. SNAP simply looks too expensive.

As I’ve written before, this isn’t necessarily a bad stock. Snap isn’t profitable. In fact, it burned some $820 million in cash during 2017. But that’s fine: It’s an early-stage growth company. It’s still learning how to sell advertising, particularly overseas.

And it’s not doing that badly, from a growth standpoint. Revenue more than doubled in 2017. The company is making progress.

But at the same time, Snap already has roughly the same market capitalization as Twitter — which itself looks overvalued. Yet the two companies probably have similar daily active user numbers (Twitter doesn’t disclose that metric) and Twitter is more profitable. It matters from a valuation standpoint that Snap’s profits remain years away.

And it’s not as if Snap’s user growth is all that impressive. A 5% increase quarter-over-quarter was seen as good news. The DAU figure rose 18% year-over-year; Twitter’s increased 12%.

Meanwhile, Snap stock is trading at 17x 2018 revenue estimates — one of the highest multiples in the entire market. It’s a multiple that requires growth to accelerate, and for Snap to become a legitimate, if still much-smaller, rival to Facebook.

It still seems like too much to ask — even after a better Q4. I don’t mind owning growth stocks, but there are better opportunities out there, among them Shopify Inc (US) (NYSE:SHOP). And that’s even assuming users eventually get used to the redesign. If they don’t — which is a real risk — Snap stock will be back in the low double-digits before you know it.

As of this writing, Vince Martin has no positions in any securities mentioned.