SNAP Is Still 'S-A-D'

While you (and your kids) may be in love with using the social media app, SnapChat (SNAP), the stock continues to be a 'dog' without any sign of recovery. This past week, SNAP just confirmed why they are one of the worst investments on the Street. Despite making nearly $400 million in acquisitions over the summer, the stock dropped over 14% on earnings this past week alone.

Analysts have been dropping their optimism on the stock in recent months. Morgan Stanley cut their price target for SNAP from $28 all the way to $16, and Credit Suisse lowered their target from $30 to $25 (still higher, and relatively optimistic). In addition, more banks, including some of the deal's own underwriters of the IPO have cut their price targets on the stock -- in particular, JPMorgan has been bearish on the stock since the stock went public. At the same time, RBC and Stifel, raised their targets and expectations amid terrible earnings.

SnapChat reported a net loss of $443 million, or 36 cents per share, worse than the 30 cents loss analysts had expected. The loss in the quarter was nearly three times as big as the $115.9 million it lost in the year-ago period. Revenue rose to $181.6 million in the quarter, from $71.8 million a year ago, but still missed expectations for $186.2 million. 

How bad has the stock been doing? Well consider that since the stock IPO'd, it has been on a pretty-much constant decline without any sign of recovery. In fact, the 1-year return is down 52.0% and 23.7% year-to-date. Quite unfortunate for those holders. 

While I do not recommend shares of SNAP, or any iffy-technology company with questionable growth prospects, this is meant to demonstrate how all of the hype of Wall Street can be (and is) way off the mark at times. Be smart and make good choices, people!

Disclosure: None.

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