SNAP Stock Falls Premarket Ahead Of Quarterly Report: Investors Watch User Growth, Ad Sales

• Analysts expect Snap’s second-quarter revenue to rise 14% to $1.53 billion.
• Snap said last quarter that conflict in the Middle East impacted its revenue.
• The retail sentiment for SNAP was ‘bullish’ as of early Monday, ahead of the results due after the markets close.

Snap, Inc.’s shares fell 3.6% in premarket trading on Monday, ahead of its quarterly results due after the market closes.

Snap will be looking to redeem itself after it said in May that the Middle East conflict weighed on sales, while the cancellation of a partnership with AI startup Perplexity further dented investor sentiment and pressured the stock. 

Investors also remain divided over the company’s aggressive investment in augmented reality glasses, a still-nascent market led by Meta Platforms. They will be looking for signs that Snap’s core advertising business is stabilizing, while closely scrutinizing its spending on a hardware bet that has yet to prove commercially viable.

Analysts' View On SNAP

Analysts expect Snap’s second-quarter revenue to rise 14% to $1.53 billion, which would be the best topline growth in the last five quarters, per Koyfin estimates. Adjusted profit is expected to rise 950% to $0.06.

In July, several analysts, including UBS and Bernstein, lowered their price targets on the SNAP stock. Wells Fargo said it doesn't expect advertising revenue to recover quickly from the Middle East conflict, and checks with U.S. advertisers remain tepid. Snap+ Q2 growth looks robust, but trends exiting the quarter slowed, the brokerage added.

Currently, 30 out of 43 analysts rate the SNAP stock ‘Hold,’ 10 rate it ‘Buy’ or higher and three rate it ‘Sell’ or ‘Strong Sell,’ per Koyfin data. Their average price target of $7.32 implies a 56% upside from the stock’s last close.

Snap’s Recent Moves 

Over the past year, Snap has accelerated its push to diversify beyond its core social media business by deepening its investments in AI and augmented reality. In June, the company unveiled Specs, its first consumer-focused augmented reality glasses, priced at $2,195, marking its biggest hardware launch since Spectacles. 

The glasses are powered by Snap OS and feature built-in AI capabilities, while Snap also expanded developer tools with new APIs and Lens Studio features to encourage the creation of immersive applications. 

Separately, Snap has continued to expand its AI-powered advertising platform, introducing new tools that automate campaign creation, creative generation, shopping experiences and creator partnerships for marketers. 

The company also rolled out AI Sponsored Snaps, enabling brands to deploy conversational AI agents within Snapchat. At the same time, Snap abandoned its planned integration of Perplexity’s AI-powered answer engine after both companies concluded the partnership no longer aligned with their product strategies, although Perplexity said it would continue advertising on Snapchat.

Retail View On SNAP

On Stocktwits, the retail sentiment for SNAP was ‘bullish’ as of early Monday, amid ‘normal’ message volume.

“$SNAP Are we ready??? Is your ambassador finally going to break even and get profit and close the position started on line of credit? I hope so! Stand tall. Stand ready. Here we come,” a trader wrote. Snap will report its results after the markets close.

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