will open social media earnings season after the market closes on Tuesday. Investors are hoping for signs of improvement as social media apps look to bounce back from a dismal 2022.
stock was up 1.7% to $11.09 in Monday trading. The stock has fallen 66% in the past 12 months, which includes a 24% rally this month. Snap was among the firms that struggled after
rolled out privacy changes in 2021 that required iPhone user consent for ad tracking. Apps use tracking to determine whether ads lead to a product sale or a site sign up. Brands also slashed advertisement spending in 2022 amid concerns about the economy and rising interest rates.
The consensus among Wall Street analysts polled by FactSet calls for Snap to report a GAAP loss of 11 cents a share and sales growth of just 0.6% from a year earlier to $1.31 billion. Sales grew 5.7% year over year in the third quarter.
The report will likely have implications for
(PINS), which report results on Wednesday and Monday, respectively, though each firm has its unique challenges and strengths.
Snap said in August it would slash 20% of its workforce to cut costs amid slower-than-expected revenue growth. The firm said it was focused on community growth, revenue growth, and augmented reality.
Benchmark analyst Mark Zgutowicz wrote in a note Monday that he has kept a Buy rating amid the firm’s decimated share price due to the firm’s prospects to better monetize its features.
“Our patience is thin following December decelerating consumer spending, initial below forecast industry ad spend indications in January, and a Snap direct response (DR) business still in disarray post [Apple’s privacy changes],” he wrote. “With that said, we do not expect near-term revisions to be as sharp as the recent past, which may provide a modest relief rally.”
On the firm’s earnings call, he expects to hear about the benefits of cost cutting, though he thinks further cuts will be needed to make up for slowing revenue growth if the firm wants to be profitable on a GAAP basis.
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