SNAP Stock Rallies On Layoffs, Updated Q1 Outlook — What’s Wall Street Saying?

• In addition to the layoffs, the company will not be filling 300 open positions, it said. 
• Snap said it was now expecting an estimated total revenue of approximately $1.529 billion for Q1, about a 12% growth year-over-year. 
• BMO Capital analyst Brian Pitz raised the price target on Snap to $15 from $13 and maintained an ‘Outperform’ rating on the shares.

Shares of Snap Inc. (SNAP) rallied more than 8% on Wednesday after the company announced a significant layoff, in addition to providing an optimistic updated financial outlook for the first quarter (Q1) of 2026.

In a regulatory filing, the Snapchat owner said it would be laying off about 1,000 employees, including 16% of its full-time employees. In addition to the layoffs, the company will not be filling 300 open positions, it said.

The company garnered attention on Wall Street as well as among retail investors after the announcements.

Layoff Update

Snap said that its layoffs would streamline operations and help it reallocate resources toward other highest-priority initiatives.

“While these changes are necessary to realize Snap’s long-term potential, we believe that rapid advancements in artificial intelligence enable our teams to
reduce repetitive work, increase velocity, and better support our community, partners, and advertisers,” said CEO Evan Spiegel in a letter to employees.

“We have already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives, including Snapchat+, enhanced ad platform performance, and efficiency improvements in our Snap Lite infrastructure,” he added.

Snap also added that the layoffs would result in pre-tax charges of between $95 million to $130 million, of which $75 million to $100 million are expected to be future cash expenditures. The majority of these costs are expected to be incurred during the second quarter of 2026, the company said.

Financial Updates

In the updated outlook, Snap said it is now expecting an estimated total revenue of approximately $1.529 billion for Q1, about a 12% growth year-over-year.

The company also said that it was now projecting an estimated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $233 million.

Street Consensus

Following the announcements, Citi raised the price target on Snap to $7 from $6 and kept a ‘Neutral’ rating on the shares, according to TheFly. The firm said that it was "encouraged" with the preliminary Q1 results and Snap’s plan to improve operating expenses, adding that the job cuts should accelerate Snap's path to net income profitability.

BMO Capital analyst Brian Pitz raised the price target on Snap to $15 from $13 and maintained an ‘Outperform’ rating on the shares, however adding that despite the positive announcements, regulatory risks remain a key concern. The firm’s price target update indicates an upside potential of about 147.5% from the current trading price of $6.06.

Meanwhile, according to data from Koyfin, the company’s stock has a 12-month average price target of $7.81 based on 44 analysts covering it. This indicates an upside potential of about 29%. A majority of the analysts have a rating of ‘Hold’ or higher on the stock.

What’s Retail Saying?

On Stocktwits, retail attention around the stock surged, with message volumes rising more than 170% in the past hour from ‘normal’ to ‘extremely high’ levels.

Meanwhile, retail sentiment around SNAP stock improved from ‘bullish’ to ‘extremely bullish’ territory.

SNAP stock has declined more than 25% so far in 2026.

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