It’s been a rough couple days for fans of Snap (NYSE:SNAP). Social media stocks have been immersed in a blood bath on Wall Street recently and Snap stock took its share of lumps.

First, it was Facebook (NASDAQ:FB) reporting decent quarterly numbers, but then giving a dour guide about slowing revenue growth and lower margins that spooked the whole sector. FB stock dropped more than 20%. Twitter (NYSE:TWTR) and Snap stock both dropped, too.

Then, Twitter reported numbers that included a drop in monthly active users. TWTR stock dropped 20%. FB stock dropped, too. And so did Snap.

Now, Snap is slated to report earnings after the bell on Tuesday, Aug. 7, and everyone is nervous. Ugly reports from Facebook and Twitter strongly imply that Snap won’t report good numbers. Research also indicates that Snapchat actually lost mind-share during the quarter to Instagram. And, Snap historically does not do well on earnings day.

Overall, then, I’m not expecting much good when Snap reports earnings next week. The numbers will likely disappoint, and Snap will likely tumble similar to FB and TWTR.

But, such a huge post-earnings dip in Snap back towards $10 could be a great buying opportunity.

Here’s a deeper look.

Don’t Expect Big Things From Snap’s Quarter

Facebook, Twitter, and Snap all operate in the same space, and compete for the same social digital media ad dollars. As such, it is highly likely that consistent themes in the Facebook and Twitter reports show up in the Snap report.

Those themes include maxed out user growth and compressing margins. Privacy legislation in Europe, fake account purges, and the law of large numbers took its toll on Facebook and Twitter’s user bases in the second quarter. Facebook’s use base barely grew. Twitter’s use base shrank.

Snapchat won’t be any different. Last quarter, the daily active user base grew by just 15% year-over-year (only marginally above Facebook’s user growth in Q1). Thus, the same user growth headwinds that hit Facebook and Twitter in Q2, will likely also hit Snapchat. Consequently, the user numbers could disappoint.

Meanwhile, Facebook and Twitter are both on watch for margins after last quarter’s performance. Both companies are investing big into ad tech and platform safety, and the outlook for out-sized margin expansion into perpetuity is now a big question mark.

Snap will presumably have less of this. A big reason for the higher spend at Facebook is due to a shift towards Story format ads. But, Snap is exclusively Story format ads. Thus, no big transition needs to be made.

Nonetheless, Snap does need to invest in platform safety and other ad tech, the sum of which will likely cause margin headwinds now and into the foreseeable future. That is a cause for concern, especially with user growth slowing.

Overall, Facebook and Twitter’s bad reports imply that Snap’s report won’t be that good. It also doesn’t help that search trends indicate that Snapchat has lost significant mind-share to Instagram over the past several months. A disappointing report in this environment will inevitably result in a big drop in Snap stock.

A Big Selloff in Snap Stock Could Be an Opportunity

Despite near-term noise, the long-term outlook on Snap stock remains promising.

Instagram provides formidable competition for the company. But, Snapchat remains one of the two most popular apps among young consumers. Also, the app is one of the biggest apps in world in the Story format, which is the future of social media engagement.

Thus, owing to its structure and big youth following, Snap has a bright future ahead of it. User growth won’t be big (the user base grew by just 2% sequentially last quarter), but revenue growth should remain robust as the company figures out how to optimally monetize its high-engagement users.

During that revenue ramp, gross margins will head higher, opex rates will fall, and overall profitability will improve.

My best guess is that Snap ‘s daily active user base shakes out around 270 million in 5 years. Average revenue per user should trend towards $10 to $15 by then, versus $4.40 last year.

Operating margins will likely head towards 30% as gross margins scale and the opex rate falls back. Putting all that together, I think Snap can do about $0.60 in earnings per share in five years.

A big-growth 25X forward multiple on that implies a four-year forward price target for Snap stock of $15. Discounted back by 10% per year, you are looking at a year-end price target for Snap of $11 to $12.

Bottom Line on Snap Stock

I’m not bullish on Snap here and now. Snap will likely follow in Facebook and Twitter’s footsteps, and report disappointsecond-quarterrter numbers. Snap will likely drop big in response to those numbers.

But, any big drops in Snap back towards $10 should be viewed as a buying opportunity. Long-term, Snap stock has healthy upside driven by significant unit revenue growth and margin expansion potential.

As of this writing, Luke Lango was long FB.