Jump to content

Is the Snapchat share price a buy at current levels?


Recommended Posts

The Snap Inc. (Snapchat) share price has responded well to restructuring and revenue guidance

BG_snap_snapchat_4433222.jpgSource: Bloomberg
 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 08 September 2022 

Snap Inc. (Snapchat)

Key points:

  • Snap share price has started to rebound from oversold territory
  • The group is currently restructuring its workforce
  • Revenue growth of 20% is targeted in 2023
  • The average broker rating for the stock is ‘hold’
  • Most IG clients with open positions on the stock expect the price to rise in the near term
  • The share price currently trades in a broad rangebound environment

Snap Inc. share price outperforming in the near term

Snap Inc. the mobile, image and camera application business has seen its share price rebounding sharply off near-term lows.

The 30% rally off its worst levels in two and a half years finds place while its Nasdaq listed peers and broader equity markets have been under pressure. The move does however correlate with recent news from the group.

Snapchat restructuring and layoffs

Snapchat announced that it will be restructuring its workforce as it looks to reprioritize its business to core areas. The areas considered a priority by group CEO Evan Spiegel, include ‘community growth, revenue growth, and augmented reality’.

The group will look to lay off around a fifth of its staff at a cost of up to $175m which would reflect in Q3 results. These costs would pertain to redundancies and contract terminations.

Snap Inc. looks to increase user base and revenue significantly in 2023

The company has recently guided that it will look to increase its user base by nearly a third and in turn grow revenue by a further 20%. Augmented Reality (AR) provides a key component to revenue with the aim of having the category contribute to around 10% of total sales.

How to trade the Snap Inc. share price

090722_Snapchat.pngSource: Refinitiv

The share price of Snap Inc. currently carries a hold recommendation (as of the 8th of September) from a consensus of 43 analysts surveyed by Refinitiv. The current price trades at roughly a 50% discount to the long-term price target mean from these analysts.

090722_ClientSentiment.pngSource: IG

As of the 8th of September 2022, 92% of IG clients with open positions on the stock expect the price to rise in the near term, while 8% of these traders expect the price to fall.

090722_Snaochat2.pngSource: IG Charts

The share price of Snap currently trades in a broad range bound environment between levels 8.85 and 15.85. In the near term we have seen a sharp rebound off the lows of this range support. Traders who are long might consider trailing their respective stop losses to a close below the 10.55 level whilst using the 12.75 as the next upside target from the move higher.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 10/06/23 07:17
  • Posts

    • Why isn't there a way to set options stop loss on IG platform?  Are you planning to implement this feature?
    • Hi,  I started trading Brent Crude Oil in IG platform but I could find a formula to correctly calculate the size I have to put while creating a position, based on the available amount I have. The quotation is based in points and it makes me wonder how operate. Any help is welcome.  Also, I plan to work with some leverage in the future, so any tip on this matter is also welcome.  Thanks.  
    • Greetings fellow traders, I am thrilled to share an exciting intraday trading idea for EURAUD that could potentially boost your profits. At Gold Signals by Professor, we have conducted a thorough technical analysis and confidently recommend a Buy position for traders like you. Our analysis indicates a significant development: EURAUD has managed to sustain itself above the crucial level of 1.60927. This breakthrough suggests a positive momentum, with potential targets at 1.61500 and 1.61800. To mitigate risks, we advise setting a stop loss around 1.60375. In order to maximize your trading success, it is vital to stay well-informed about the latest news and events that may impact the FX market. Factors such as global economic conditions, geopolitical tensions, and central bank policies can influence the price movements of EURAUD. Please note that the momentum of the trade can be influenced by unforeseen events or news. Therefore, we will be updating this level regularly in our channel to ensure you have access to the most recent trends and analysis of Gold and its trading potential. Wishing you all a prosperous day filled with successful trades!
  • Create New...