Snap Inc. loses 14% in the stock market as its quarterly revenue falls shy of the analysts’ estimate

2019’s fourth quarter wasn’t too kind for Snap Inc. as per its earnings report that fell shy of the analysts’ estimate for revenue. While the company beat the forecast on the earnings front, share prices were still seen as much as 14% lower in extended trading on Tuesday, after the release of the quarterly performance results. According to Refinitiv, analysts were expecting $563 million in revenue for Snap in the fourth quarter. Experts had also anticipated the company to make 1 cent of earnings per share. In its report on Tuesday, Snap Inc. declared a slightly lower $561 million in quarterly revenue while the company made a higher 3 cents of earnings per share in the recent quarter.

Snap Beats FactSet’s Estimate For Global Daily Active Users

FactSet had anticipated $2.62 of revenue per user for Snap in Q4. In terms of global daily active users, FactSet had announced the estimate at 215 million. While the company beat the latter forecast and recorded 218 million global daily active users, revenue per user came out short at $2.58. At $561 million, Snap’s revenue in the fourth quarter was 44% higher as compared to the same quarter last year. On the daily active users’ front, fourth-quarter posted a 17% increase as compared to 2018’s Q4. Following the quarterly performance results, Snap also announced its guidance for fiscal 2020 that highlighted the company to be expecting $450 million to $470 million in revenue this year. Experts, on the other hand, are anticipating a lower $462 million in revenue for Snap in 2020. According to CFO Derek Andersen, Snap Inc. is working diligently towards achieving the goal of full-year profitability in fiscal 2020. The company also expressed confidence that it is performing fairly well against staunch competitors like TikTok and Facebook. User base, Snap added, is growing at a sufficient pace while the use of augmented reality technology and focusing on young users is helping a great deal in fueling higher ads driven sales.

CEO Spiegel Says Cameos Feature Has Potential To Drive Growth

Towards the end of last year, Snap introduced a new feature that it called Cameos that enabled the users to loop videos. The feature, as per the CEO Spiegel, is potentially driving growth for Snap Inc. and is expected to contribute further in the upcoming months. Snap’s performance in the stock market hasn’t been impressive in 2020 so far. The stock opened at around $16.80 in January and following the drop after the release of the earnings report, it is currently exchanging hands at around the same level.