Why Is Snap (SNAP) Stock Soaring Today

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Radek Strnad 2023/05/17 2:52 pm EDT

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What Happened:

Shares of social network Snapchat (NYSE: SNAP) jumped 6.74% in the morning session after Arete Research upgraded the stock's rating from Neutral (Hold) to Buy and issued a price target of $12.

What is the market telling us:

Snap's shares are quite volatile and over the last year have had 71 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 20 days ago, when the stock dropped 19.8% on the news that the company reported first-quarter revenue that missed analysts' revenue expectations, with both daily active users and revenue per user below expectations. EBITDA also missed. This marked the fifth straight quarter of topline revenue miss. SNAP’s business is likely experiencing company-specific issues, as advertising and social media peers have broadly reported fine to good results.

Snap is up 5.21% since the beginning of the year, but at $9.32 per share it is still trading 62% below its 52-week high of $24.54 from May 2022. Investors who bought $1,000 worth of Snap's shares 5 years ago would now be looking at an investment worth $880.90.

Is now the time to buy Snap? Access our full analysis of the earnings results here, it's free.