SNAP Falls 22% in a Year: Should You Buy, Sell or Hold the Stock?

Group 1: Company Performance - Snap (SNAP) shares have declined by 22.1% over the past 12 months, underperforming the Zacks Computer and Technology sector's growth of 6.8% and the Zacks Internet - Software industry's return of 7.3% [1] - The company has faced slow revenue growth in North America due to weaker demand from large clients, with brand-oriented advertising revenues also declining [6] - Despite competitive pressures, Snap has managed to beat the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average surprise of 58.57% [5] Group 2: Competitive Landscape - Snap's underperformance is largely attributed to intense competition from major players like Meta Platforms' Facebook and Apple, which are encroaching on Snap's market share [2] - Facebook's strategy of replicating Snapchat features has resulted in increased user engagement on its platforms, surpassing Snapchat's popularity [2] - Apple is preparing to enter the Augmented Reality (AR) advertising space, posing a significant threat to Snap, which currently leads in this area [2] Group 3: Innovations and Future Prospects - Snap continues to invest in AR technology, introducing features such as GPS and GNSS integration for location-based AR experiences, which could enhance user engagement [3] - New applications like NavigatAR, Path Pioneer, and Peridot Beyond are expanding Snap's AR capabilities, potentially increasing advertising revenues [3][4] - The company has seen a growing number of small and medium-sized advertisers contributing to its advertising revenues, despite facing challenges from larger advertisers [7] Group 4: Financial Outlook - The Zacks Consensus Estimate for Snap's first-quarter 2025 earnings is set at 4 cents per share, indicating a year-over-year growth of 33.33% [4] - Expected revenues for the first quarter of 2025 are projected to be between $1.33 billion and$1.36 billion, with a consensus mark of $1.35 billion, reflecting a year-over-year increase of 12.82% [5] - Snap's current Zacks Rank is 3 (Hold), suggesting that investors may want to wait for a more favorable entry point in 2025 [8]