Snap's 59% post-earnings gain still leaves stock in red for year

[LONDON] Snap surged 59 per cent Friday (Feb 4), but even that will not be enough to recoup the social media stock's year-to-date losses.

The shares soared as high as US$40.65 after the Snapchat parent gave a quarterly sales update that left analysts positively surprised, but that was still well below the US$47.03 where they ended 2021.

The stock is rebounding from a 24 per cent plunge on Thursday that was triggered by concern that a growth slowdown at Facebook and Instagram parent Meta Platforms would prove to be industry-wide.

Large-cap technology stocks have also been hit more broadly in recent weeks on concern around a tightening of US monetary policy.

"Simply put, Snap results were better than feared," KeyBanc analyst Justin Patterson wrote in a note to clients.

The firm is seeing "solid" revenue growth, while improvements in advertising efficacy and monetisation of features like Spotlight and Maps offer potential upside drivers, Patterson said.

The stock closed at US$38.91 on Friday. The results were announced after markets closed on Thursday.

Snap's longer-term losses are even more severe. The stock is down about 48 per cent since Oct 21, when the firm issued financial guidance that missed Wall Street targets, warning that changes to Apple's data collection rules and supply chain disruption were weighing on advertising spending. BLOOMBERG