Snap stock pushed higher late Tuesday, after the Snapchat parent company reported third quarter earnings and sales that bested market forecasts. But the social media company's sales forecast that came in slightly below views.
Snap said that it earned an adjusted 8 cents per share on sales of $1.37 billion for the September-ended quarter. Analysts polled by FactSet projected the Santa Monica, Calif.-based company would post adjusted earnings of 5 cents per share on sales of $1.36 billion. Revenue grew 15% year-over-year.
"I'm proud of the team's progress this quarter, delivering strong community growth and deepening engagement while driving improved financial performance," Chief Executive Evan Spiegel said in a news release. "Our investments in AI and AR are powering new creative experiences for our community and driving innovation across our advertising platform, underpinning our long-term growth opportunity."
On the stock market today, Snap stock is up more than 5% at 11.50 in recent after-hours action.
Snap Q4 Sales Forecast
Snap also posted stronger-than-expected user growth. The company said it had 443 million daily active users, up 9% from last year. Wall Street analysts were forecasting 441 million.
Meanwhile, the company said its Snapchat+ $3.99-per-month subscription product reached 12 million subscribers in the quarter. That's more than double the total from the same period last year, according to the company.
However, Snap did give a slightly lower than expected Q4 sales forecast. For the current quarter, Snap said it expects sales of $1.54 billion, at the midpoint of its range. Analysts were projecting $1.56 billion analysts for the December-ending quarter.
The company said its estimates reflect slower demand from large companies looking to build brand awareness.
"Upper funnel advertising from large enterprise clients has historically been an important component of demand in Q4, and this portion of the business has been underperforming our overall ads business in recent quarters," Snap's letter to shareholders Tuesday read.
Snap Stock: Technical Ratings
Prior to earnings, Snap gained 1.6% in Tuesday trading. Shares are down 36% year-to-date but ahead 17% compared to 12 months ago.
Coming into the report, Snap stock had an IBD Composite Rating of 51 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 a weak 13 out of 99. The RS Rating means that Snap has outperformed just 13% of stocks in IBD's database over the past year.
