If Flying Cameras Are the Future, Then Snap Stock Will Be a Multi-Bagger

  • Snap (SNAP) recently released financial results with a mix of positive and negative data points.
  • However, investors don’t have to obsess over the numbers and can instead consider Snap’s buzz-worthy product innovation.
  • Investors should learn more about the Pixy product and consider accumulating a few Snap shares.
Snapchat (SNAP) application on android cell smartphone. Snapchat is a mobile messaging application used to share photos, videos, text, and drawings.

Source: dennizn / Shutterstock.com

Snap (NYSE:SNAP) operates the popular social media app known as Snapchat. Prospective SNAP stock traders will need to weigh the company’s financial stats while also getting the scoop on a product which could be game-changing. In the final analysis, the outlook for Snap is bullish, but with caution.

In order to compete successfully as a social media company, Snap can’t just rely on the current popularity of its Snapchat app. The company must continually push the boundaries and devise new products/services.

If the company fails to do this, SNAP stock’s downtrend will probably continue. Fortunately, there’s a hot new product that’s in the headlines and could signal a turnaround for Snap and its shareholders.

At the same time, it’s important to consider Snap’s financials, which present a mixed picture. All in all, you might be convinced to take a small and cautious, but still confident position in Snap.

Ticker Company Current Price
SNAP Snap $14.32

What’s Happening With SNAP Stock?

Technology stocks in general, and social media stocks in particular, haven’t done well lately. SNAP stock is a perfect example of this, as it has fallen from a 52-week high of $83.34 to the $20s (and below) recently.

Is this magnitude of share-price decline justified? Or, is this a prime buying opportunity? To arrive at an answer, a great place to start is with the hard data.

Delving into Snap’s first-quarter 2022 financials, there’s fodder for both the bulls and the bears. The main bearish point is Snap’s widening net earnings loss. Specifically, the company incurred a net loss of $360 million in Q1 2022. That’s notably worse than the $287 million net loss from the prior-year quarter.

On the other hand, Snap also reported a 38% year-over-year revenue increase to $1.06 billion. The company also announced an adjusted EBITDA of $64 million, which is a huge improvement over the $1.7 million adjusted EBITDA loss from the first quarter of 2021.

This Could Change Everything

Even beyond the mixed but mostly positive financials, Snap now has a product that could alter the social media landscape as we know it.

Its Pixy, a “friendly flying camera” and a “pocket-sized, free-flying sidekick that’s a fit for adventures big and small.” There’s a video from The Wall Street Journal demonstrating Pixy, and I must admit, it does look like a pretty cool gadget to have.

Snap describes Pixy as a flying camera that can “float, orbit, and follow wherever you lead, without a controller or any set-up.” Moreover, Pixy “finds its home in your hand, landing gently at the end of the flight.”

This product has garnered the attention of The Wall Street JournalMarketWatch and others. Also, InvestorPlace contributor Muslim Farooque called the Pixy drone “highly promising and gaining strong traction in the market.” I’m convinced that Farooque is right. However, only time will tell whether Pixy (pardon the pun) takes off.

What You Can Do Now

Pixy will, to a certain extent, determine Snap’s ability to remain competitive in the social media space. Clearly, there’s a lot riding on this pocket-sized product.

Meanwhile, Snap’s financials are imperfect but not overwhelmingly negative. Thus, investors are invited to take a small long position in SNAP stock. Just maybe, it will fly higher in the second half of 2022.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2022/05/if-flying-cameras-are-the-future-then-snap-stock-will-be-a-multi-bagger/.

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