Why it Might Be a Good Idea to Buy Snap Ahead of Earnings

Snap Inc (NYSE:SNAP) has seen its share price rise 12% in the past week as the stock looks to climb back after being on a sharp decline for the past three months. The company’s earnings are coming up in November and with the share price taking a beating it might not be a bad idea to buy the stock at a low. There is certainly a lot of reason not to buy the stock, as the company overstated its growth and allegedly inflated its numbers. However, stock prices move based on expectations, and the stock has all that negativity already priced into its value.

With expectations at a low, it might not take much for Snap’s price to see an increase on earnings day. Since the launch of its IPO in March, the stock has lost nearly 40% of its value. Despite the company seeing revenue in its last quarter more than double from a year ago, its losses tripled.

There is a lot wrong with the stock and until it can convince investors that the growth it promised will materialize, or it can come close to turning a profit, it will be hard to imagine seeing lots of positive momentum in the share price.

However, in the short term anything can happen, and all Snap needs to do is have a quarter that is less bad than what is expected from analysts. The company is certainly feeling the pressure to achieve better results, and if it does, investors of Snap could be rewarded handsomely for the risk.