Snap (NYSE:SNAP) made its market debut all the way back in March 2017. Since gaining early momentum, the stock struggled mightily until it finally broke out in a big way in the latter half of 2020. Indeed, Snap stock achieved an all-time high of $83.34 in late September. However, it has plunged 27% week-over-week as of close on October 26. Is it worth buying the dip in Snap?
The company released its third quarter 2021 results on October 21. It delivered revenue growth of 57% year-over-year to $1.06 billion.
Moreover, its net loss improved 64% to $72 million. Adjusted EBITDA soared 209% to $174 million. Better yet, free cash flow rose to $52 million compared to a $70 million loss in the third quarter of 2020.
Revenue in the first nine months of 2021 have increased 77% to $2.81 billion. Moreover, adjusted EBITDA soared 341% to $289 million. On the other hand, Snap did take a hit as its sales fell short of expectations. The company put the blame on privacy changes imposed by Apple.
Meanwhile, it also said that business was disrupted by ongoing supply chain issues.
Snap is heavily reliant on its advertising revenue as the app itself has faced stiff competition from opponents like the Facebook-owned WhatsApp and Instagram. Shares of Snap last had an RSI of 26. That puts Snap in technically oversold territory. The company’s quarter was not as bad as originally reported, and there are some bright spots that investors can take away. Investors looking for a high-risk high-reward play should consider buying the dip right now.
