Traders Buy Large Volume of Call Options on Snap (NYSE:SNAP)

Key Points

• Traders purchased an unusually large volume of calls—183,007 call options on Snap, a 47% increase versus the typical 124,131 call contracts, signaling elevated bullish options activity.
• Snap missed quarterly EPS expectations (reported $0.03 vs. est. $0.15) though revenue rose 10.2% YoY; the stock traded at $6.13 with a market cap of $10.35 billion and negative net margin/ROE.
• Insider selling was notable: CFO Derek Andersen sold 92,956 shares and CTO Robert C. Murphy sold 1,000,000 shares, with insiders offloading 2,565,573 shares (~$13.33M) over the past 90 days.

Snap Inc. (NYSE:SNAP - Get Free Report) was the target of unusually large options trading on Wednesday. Traders purchased 183,007 call options on the company. This is an increase of 47% compared to the typical volume of 124,131 call options.

Snap Price Performance

Shares of SNAP traded up $0.02 during trading hours on Wednesday, reaching $6.13. 44,220,955 shares of the company's stock traded hands, compared to its average volume of 52,794,855. The stock has a market cap of $10.35 billion, a PE ratio of -22.65 and a beta of 1.05. The company has a current ratio of 3.56, a quick ratio of 3.56 and a debt-to-equity ratio of 1.53. The firm's 50 day simple moving average is $5.09 and its 200-day simple moving average is $6.60. Snap has a 12 month low of $3.81 and a 12 month high of $10.41.

Snap (NYSE:SNAP - Get Free Report) last announced its quarterly earnings data on Wednesday, February 4th. The company reported $0.03 earnings per share for the quarter, missing analysts' consensus estimates of $0.15 by ($0.12). The firm had revenue of $1.72 billion for the quarter, compared to analysts' expectations of $1.70 billion. Snap had a negative net margin of 7.76% and a negative return on equity of 20.72%. The business's quarterly revenue was up 10.2% on a year-over-year basis. During the same period in the prior year, the business posted $0.01 earnings per share. Equities analysts expect that Snap will post -0.12 EPS for the current year.

Insider Activity at Snap

In other news, CFO Derek Andersen sold 92,956 shares of the firm's stock in a transaction that occurred on Monday, March 16th. The shares were sold at an average price of $4.59, for a total transaction of $426,668.04. Following the completion of the transaction, the chief financial officer directly owned 3,799,661 shares of the company's stock, valued at $17,440,443.99. This trade represents a 2.39% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CTO Robert C. Murphy sold 1,000,000 shares of Snap stock in a transaction on Tuesday, February 10th. The stock was sold at an average price of $5.36, for a total value of $5,360,000.00. Following the sale, the chief technology officer directly owned 49,313,775 shares of the company's stock, valued at $264,321,834. This represents a 1.99% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 2,565,573 shares of company stock worth $13,329,781.

Institutional Investors Weigh In On Snap

Several hedge funds have recently added to or reduced their stakes in the stock. Allworth Financial LP raised its stake in shares of Snap by 92.3% in the third quarter. Allworth Financial LP now owns 3,293 shares of the company's stock worth $25,000 after purchasing an additional 1,581 shares during the last quarter. Oak Harvest Investment Services purchased a new stake in Snap during the fourth quarter valued at $26,000. Arax Advisory Partners increased its position in Snap by 220.0% during the fourth quarter. Arax Advisory Partners now owns 3,309 shares of the company's stock valued at $27,000 after acquiring an additional 2,275 shares during the last quarter. V Square Quantitative Management LLC purchased a new stake in Snap during the fourth quarter valued at $29,000. Finally, EverSource Wealth Advisors LLC increased its position in Snap by 561.4% during the fourth quarter. EverSource Wealth Advisors LLC now owns 3,618 shares of the company's stock valued at $29,000 after acquiring an additional 3,071 shares during the last quarter. 47.52% of the stock is owned by institutional investors.

Analyst Ratings Changes

SNAP has been the topic of several analyst reports. Cantor Fitzgerald reduced their target price on Snap from $9.00 to $7.00 and set a "neutral" rating on the stock in a report on Thursday, February 5th. KeyCorp raised Snap from a "sector weight" rating to an "overweight" rating in a research note on Monday, April 27th. TD Cowen initiated coverage on shares of Snap in a research report on Monday, April 27th. They issued a "buy" rating for the company. BNP Paribas Exane downgraded shares of Snap to a "neutral" rating in a report on Monday, April 27th. Finally, Wells Fargo & Company lowered their price objective on shares of Snap from $8.00 to $6.00 and set an "equal weight" rating on the stock in a report on Tuesday, April 7th. One analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating, twenty have issued a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of "Hold" and an average target price of $7.93.

Snap Company Profile

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.

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