Snap Inc (NYSE:SNAP) likes to call itself a camera company, but right now, the more appropriate labeling is “niche teenage-focused phone application.” The parent company of Snapchat has been public for three quarters, and all three quarters have been disastrous for SNAP stock.

The company’s first two earnings reports dismantled the bull thesis. They underscored that Snap is struggling to compete against Facebook Inc (NASDAQ:FB) and Instagram for ad dollars. They also emphasized that Snap will have a difficult time breaking out of its niche audience. Together, those two reports sent SNAP stock to all-time lows.

But this latest earnings report is much worse.

Although I was strongly bearish on SNAP stock into the print, I was overall only slightly bearish on the stock’s long-term prospects.

After the third-quarter earnings report, I am strongly bearish on the stock’s long-term prospects. Growth is decelerating at an alarming rate, operating expenses are booming, and management is getting desperate. The writing is on the wall for SNAP stock to keep grinding lower in both the near- and long-term.

Snap’s Really, Really Bad Quarter

I’m a believer that Wall Street tends to overreact most of the time. Good news is often interpreted as great news. Bad news is often interpreted as horrible news.

But Wall Street isn’t overreacting by selling SNAP stock off by 15% in Wednesday morning trade. In fact, the Street might be under-playing just how bad the quarter really was.

It was really, really bad. Just look at the numbers.

Revenue growth has slowed from 286% in Q1 to 153% in Q2 to just 62% in Q3. That is an alarming slowdown, and it brings Snap’s revenue growth pretty close to Facebook’s revenue growth. Facebook has been growing revenues right around 50% in each quarter this year. That means Facebook and Snap are growing revenues at a similar rate despite Facebook having a revenue base that was nearly 50 times as big as Snap’s revenue last quarter.

Let that sink in.

The same alarming slowdown is happening everywhere.

Snap added only 4.5 million daily active users in the quarter. That is just over half as many as Snap has added in each of the past 2 quarters. It also looks a lot like the low-growth Twitter Inc (NYSE:TWTR), which added 4 million monthly active users last quarter. Facebook added 43 million daily actives last quarter.

Average revenue per user (or ARPU) almost tripled in Q1 and more than doubled in Q2. In Q3, it was up just 39% to a measly $1.17. Worse yet, Snap’s North America ARPU only grew 23% to $2.17. Facebook’s North America ARPU grew 35% last quarter to $21.20.

Again, let that sink in.

Meanwhile, the one thing not really moderating is expense growth. Expenses continue to balloon. They more than doubled in the third quarter. Adjusted EBITDA has just hovered around -$180 to -$190 million in each quarter this year despite robust revenue growth.

What The Bad Quarter Means for SNAP

The bad third-quarter results underscore that right now, the strongest thesis out there is that Snap will forever remain a niche app with exclusively teenage appeal. That means Snap will look like an off-shoot version of Twitter in the future, not the next Facebook.

The next strongest thesis out there is that Snap will actually fade out of favor with its core demographic. In an attempt to reinvigorate user growth, Snap is entirely redesigning its app. But part of the reason teenagers like the app so much is because of its somewhat confusing, not-so-structured user interface, which keeps parents off the platform. A redesign risks upsetting those teenagers, and losing them to Instagram.

Both of those theses imply SNAP stock heading lower.

Bottom Line on SNAP Stock

It was a really bad quarter. The long-term outlook is bleak. World domination hopes have been dashed. The stock is adjusting downward to reflect more appropriate expectations for niche, teenage-demographic dominance.

The best thing to do is stay away from SNAP stock while it adjusts downward. After the dust settles, there may be an opportunity, but not now.

As of this writing, Luke Lango was long FB.