What happened to Snap (NYSE:SNAP) stock?
Over the last month, shares of Snapchat’s parent company are down 30% in the last month. That’s worse than every other social media stock.
It wasn’t that long ago that SNAP stock was running high, coming off a historic fourth-quarter earnings report in which it reported its first quarterly net profit. Investors took Snap and ran, pushing the stock 58% higher in a single day.
But that’s just history now. And in the stock market (as in most things) the most important thing is what the stock is doing now, rather than what happened in the past.
Take a look at this recent performance over the last month.
- Snap: 30%
- Meta Platforms (NASDAQ:FB): 11%
- Twitter (NYSE:TWTR): 1.04%
- Pinterest (NYSE:PINS): 17.2%
- Digital World Acquisition Corp. (NASDAQ:DWAC): 20%
- Match Group (NASDAQ:MTCH): 26%
So while you can blame the downturn overall in tech stocks for some of Snap’s problems, that doesn’t tell the whole story. SNAP stock is by far underperforming its peers over the last 30 days. And so far this year, Snap is down nearly 42%.
Earnings in the first quarter of this year weren’t nearly as good as that historic Q4 report. Snap reported revenue of $1.06 billion, missing analysts’ expectations of $1.07 billion. Earnings per share also came up short. Analysts expected a loss of 0.01 cent per share but the company reported losing 0.02 cents per share.
And while the global daily active users grew 18% to 332 million, it also projected lower-than-expected revenue for the second quarter. The company projected revenue to increase by 20% and 25%, while analysts were expecting revenue growth of 28%.
Wedbush analyst Ygal Arounian lowered the company’s price target on SNAP shares from $40 to $34.
All in all, SNAP stock is a huge disappointment right now. Shares experienced the dreaded “death cross” — when the 50-day moving average slips below the 200-day moving average — back in November and the stock has never really recovered. Even that massive 58% return in February was short-lived, and Snap stock has nearly given back all of those gains.
I wouldn’t buy SNAP stock until it shows a meaningful level of support. Maybe it can collect one here at $27 per share, but if the stock slips below $20, then that’s a sign of real trouble.
On the date of publication, Patrick Sanders 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.
