Everywhere you look right now, it seems like stocks are hitting all-time highs. Every other notification I get reads something like “stock X just hit a new all-time high.” But one stock that isn’t anywhere near all-time highs is Snap Inc (NYSE:SNAP). Snap stock presently trades under $13, versus a 52-week high of over $20 and an all-time high of right around $30

Why the sharp weakness in Snap stock despite the broad bullish sentiment in the stock market?

Snap has failed to execute on a sustainable monetization strategy amid rising competition from Facebook Inc (NASDAQ:FB), Alphabet Inc (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Twitter Inc (NYSE:TWTR), and others.

User growth is also a going concern. The combination of monetization and user growth issues have persistently plagued Snap stock for the past several months.

But, I don’t think all is lost with Snap stock.

This is still one of the most popular apps among younger consumers. Snap has a unique potential to leverage that popularity to become a critical component of any advertising campaign. Plus, user growth actually has a healthy outlook through international expansion.

As such, Snap stock is risky here. But the reward profile is also attractive.

Here’s a deeper look.

Snap Still Is a Hot Platform

Snapchat is still one of the hottest social media platforms in America, especially among younger audiences.

According to a recent Pew survey, Snapchat is the third most widely used social media app among teens in North America (69% mind-share), slightly behind Instagram (72%) and YouTube (85%). Moreover, in that same survey, Snapchat ranked first as the app that teens say they use the most (35%, versus only 15% for Instagram).

Meanwhile, Piper Jaffray’s Spring 2018 Taking Stock With Teens survey found that Snapchat is by far and away the most popular app among U.S. teens. It ranked first in terms of mind-share at 45%, with Instagram a distance second at 26%. An RBC Capital survey reached a similar conclusion that Snapchat is the most popular app among teenagers.

Overall, Snapchat is still very popular. After all, it was the most downloaded app in 2016 and the second most downloaded in 2017 (first was Bitmoji, which got a big boost thanks to it being integrated with Snapchat).

I’d be wrong to say that Snapchat’s recent redesign hasn’t caused a slight user and engagement shift towards Instagram, as was clearly underscored by Snap’s recent ugly quarterly numbers. Users don’t like the redesign, and because Instagram offers essentially the same service, the net result of users not like the redesign is users interacting less with Snapchat and more with Instagram.

That is bad.

But, in the bigger picture, Snapchat remains one of the hottest apps among one of the most valuable demographics: younger people. If the company can maintain its dominance in that crowd and grow internationally, then this could be a very valuable company.

How Snap Can Jump to a  $20 Billion-Plus Valauation

Facebook is the king of digital advertising. It is a wide-reach, big-growth, and big-margin platform that is the ideal for the digital advertising world. From this perspective, the ultimate goal for Snap is to look something like Facebook someday.

That could happen.

If Snapchat maintains its dominance among the youth demographic and continues to improve its advertising solutions, then the company could transform into a go-to digital advertising platform for companies who do not necessarily need max reach, but instead need max engagement among younger consumers.

Consequently, Snapchat could become a critical part of any advertising campaign that wants to reach young consumers.

In that scenario, Snapchat’s average revenue per user (ARPU) won’t be as big as Facebook’s ARPU, but it will be big. Facebook’s annual global ARPU is over $20 and growing. In five years, then, Snapchat could easily get to $15.

Now, assume conservatively that the user base grows to about 300 million in five years due to international expansion. That combination gets you to $4.5 billion in revenues in five years.

Facebook operates at over 40% net profit margins, so Snapchat heading towards 20% or higher net margins in five years isn’t unlikely. Under that assumption, you are looking at potentially $900 million in net profits in five years.

Facebook and Google trade at 25-times forward earnings. A 25 forward multiple on $900 million implies a valuation in four years of roughly $22.5 billion, versus a present-day market cap of $16 billion.

And that is with a Facebook/Google multiple. It is more likely SNAP gets a bigger multiple because it will be a faster grower. As such, a $20 billion-plus valuation in the aforementioned scenario may actually prove to be conservative.

Bottom Line on SNAP Stock

Risky? Yes. But SNAP has a promising growth trajectory through dominance among America’s young consumers and expansion into international markets. With the stock hovering near all-time lows while the market is at all-time highs, now seems like the right time to gobble up some Snap stock.

As of this writing, Luke Lango was long SNAP, FB, GOOG, and AMZN.