Snap stock sank late Thursday, after the Snapchat parent reported weaker-than-expected second quarter revenue and gave a sales outlook below expectations. Earnings met expectations.
Snap said that it earned an adjusted 2 cents per share on sales of $1.24 billion for the June quarter. On average, analysts projected the Santa Monica, Calif.-based company would post adjusted earnings of 2 cents per share on sales of $1.25 billion, according to FactSet.
For the same period a year earlier, Snap posted adjusted loss of 2 cents per share on sales of $1.07 billion. Revenue increased 16% year-over-year, decelerating from 21% growth in the first quarter.
For the current quarter, Snap guided for sales of $1.355 billion at the midpoint of its range. Prior to company posting its results, analysts were projecting the social media firm would tally $1.36 billion in sales for the September-ending quarter, according to FactSet.
On the stock market today, Snap stock is down 22% at 10.02 in recent after-hours action.
"Our community grew to reach more than 850 million monthly active users in Q2, with more than 11 million Snapchat+ subscribers," said Snap Chief Executive Evan Spiegel in a news release. "We continued to scale our advertising platform with active advertisers more than doubling year-over-year."
Snapchat+ is Snap's subscription product that offers access to exclusive app features for $3.99 per month.
Snap Stock: Technical Ratings
Prior to earnings, Snap stock fell 3.8% in regular Thursday trading. Shares have gained lost 24% this year, not including Thursday's after-hours slide, but are up 13% compared to 12 months ago. Snap shares surged following Snap's strong Q1 report but have given back those gains. The stock is still well below highs it reached in 2021 before a slump in the digital advertising market contributed to a steep slide for Snap.
Coming into the report, Snap stock had a meager IBD Composite Rating of 35 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Snap's IBD Relative Strength Rating was 31 out of 99. The RS Rating means that the Snapchat owner has outperformed just 31% of all stocks in IBD's database over the past 12 months.
