Snap (NYSE:SNAP) Stock Falls 4.2% - Here's What Happened

Key Points

• Snap shares fell 4.2% to about $6.08 in midday trading, with volume sharply below the stock’s average daily level.
• Analysts maintain a consensus “Hold” rating with a $7.68 price target; recent firms largely kept neutral ratings while modestly raising targets.
• Snap’s latest quarterly results beat expectations, with adjusted EPS of negative $0.10 versus negative $0.12 expected and revenue of $1.60 billion, up 18.9% year over year. Insiders sold roughly 2.45 million shares worth $13.4 million during the last quarter.

Snap Inc. (NYSE:SNAP - Get Free Report) traded down 4.2% during mid-day trading on Tuesday. The company traded as low as $6.12 and last traded at $6.0750. Approximately 3,641,857 shares traded hands during trading, a decline of 92% from the average daily volume of 45,226,848 shares. The stock had previously closed at $6.34.

Analyst Ratings Changes

Several research firms recently commented on SNAP. Sanford C. Bernstein reissued a "market perform" rating and set a $5.00 price objective on shares of Snap in a research note on Tuesday, July 21st. Wells Fargo & Company raised their target price on shares of Snap from $5.00 to $6.00 and gave the company an "equal weight" rating in a research note on Tuesday, August 4th. DA Davidson lifted their target price on shares of Snap from $5.00 to $5.25 and gave the company a "neutral" rating in a report on Tuesday, August 4th. Zacks Research upgraded shares of Snap from a "strong sell" rating to a "hold" rating in a report on Tuesday, September 1st. Finally, Piper Sandler reissued a "neutral" rating on shares of Snap in a research report on Tuesday, August 4th. One analyst has rated the stock with a Strong Buy rating, ten have assigned a Buy rating, twenty-three have issued a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, Snap currently has a consensus rating of "Hold" and a consensus price target of $7.68.

Snap Trading Down 3.4%

The firm has a 50-day moving average price of $5.71 and a 200-day moving average price of $5.51. The company has a debt-to-equity ratio of 1.75, a quick ratio of 2.94 and a current ratio of 2.94. The stock has a market cap of $10.36 billion, a PE ratio of -34.03 and a beta of 1.07.

Snap (NYSE:SNAP - Get Free Report) last announced its quarterly earnings results on Monday, August 3rd. The company reported ($0.10) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($0.12) by $0.02. Snap had a negative net margin of 4.90% and a negative return on equity of 14.61%. The company had revenue of $1.60 billion for the quarter, compared to analysts' expectations of $1.54 billion. During the same quarter in the previous year, the business posted ($0.16) EPS. Snap's revenue was up 18.9% compared to the same quarter last year. As a group, equities analysts anticipate that Snap Inc. will post -0.03 EPS for the current fiscal year.

Insider Transactions at Snap

In related news, CTO Robert Murphy sold 2,000,000 shares of the firm's stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $5.55, for a total transaction of $11,100,000.00. Following the completion of the sale, the chief technology officer owned 41,809,791 shares of the company's stock, valued at $232,044,340.05. This trade represents a 4.57% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CFO Douglas Hott sold 131,884 shares of the firm's stock in a transaction that occurred on Monday, August 17th. The shares were sold at an average price of $5.20, for a total transaction of $685,796.80. Following the sale, the chief financial officer directly owned 2,324,563 shares of the company's stock, valued at $12,087,727.60. This trade represents a 5.37% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders have sold 2,445,926 shares of company stock valued at $13,426,930.

Hedge Funds Weigh In On Snap

Several hedge funds and other institutional investors have recently added to or reduced their stakes in SNAP. Assenagon Asset Management S.A. increased its holdings in shares of Snap by 278.5% in the 3rd quarter. Assenagon Asset Management S.A. now owns 14,771,533 shares of the company's stock worth $79,766,000 after purchasing an additional 10,868,392 shares in the last quarter. Empyrean Capital Partners LP purchased a new position in shares of Snap in the first quarter worth $25,300,000. Saba Capital Management L.P. lifted its holdings in shares of Snap by 232.5% during the first quarter. Saba Capital Management L.P. now owns 4,727,808 shares of the company's stock valued at $21,748,000 after purchasing an additional 3,306,024 shares in the last quarter. Swiss National Bank lifted its holdings in shares of Snap by 7.1% during the first quarter. Swiss National Bank now owns 3,160,100 shares of the company's stock valued at $14,536,000 after purchasing an additional 209,900 shares in the last quarter. Finally, Riposte Capital LLC bought a new position in shares of Snap during the first quarter valued at $5,520,000. 47.52% of the stock is owned by institutional investors.

About Snap

Snap Inc is a technology and social media company best known for Snapchat, a visual messaging and social networking application. Snapchat enables users to communicate through photos, videos, messages and Stories, while offering creative tools such as augmented reality (AR) Lenses and filters. The platform also includes features such as Snap Map, Spotlight and content from publishers and creators.

Snap generates most of its revenue from digital advertising, including video, augmented reality and other advertising formats delivered across Snapchat.

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