Snap Shares Plunge as Revenue Growth Disappoints Wall Street

Snap, the social-media company behind Snapchat, experienced a significant fall in shares, plunging 31% to $11.95 in after-market trading on Tuesday. This drop came as the fourth-quarter revenue growth fell short of Wall Street's estimates.

Despite the setback, Snap's stock has shown overall growth in the past year, as it closed up 4.2% at $17.45 and experienced a 43% increase over the last 12 months.

Snap's top line saw a modest 5% increase from $1.3 billion to $1.36 billion. However, analysts polled by FactSet had anticipated a higher figure of $1.38 billion.

Nevertheless, there were positive indications in Snap's quarterly results, primarily attributed to ongoing improvements in its advertising platform. The company managed to narrow its loss from $288.5 million to $248.2 million compared to the previous year. Additionally, adjusted earnings of 8 cents per share exceeded analysts' expectations of 6 cents. Furthermore, daily active users saw an encouraging 10% rise to 414 million compared to the previous year.

Looking ahead, Snap's first-quarter revenue is projected to fall within the range of approximately $1.1 billion to $1.14 billion, aligning with analysts' estimates.

Written by Denny Jacob.