Snap Inc. (NYSE:SNAP) sunk to a 52-week low this October. Tech stocks in the United States have been battered by the current global sell-off, but Snap has struggled since late February.
Snap launched its initial public offering back in March 2017. The stock spiked on enthusiasm over the application, but the optimism quickly dissipated. Since the company has consistently failed to report profitability while other applications like Facebook-owned Instagram and Whatsapp have reported user numbers that dwarf those at Snapchat.
To combat these problems, Snap leadership decided to re-tool its flagship application to grow its userbase and advertising revenue. The company reported its second-quarter results on August 7. Free cash flow fell to negative $234 million compared to negative $229 million in Q2 2017. However, Snap did see revenue climb 44% year-over-year to $262 million while its net loss fell by 20% to $353 million compared to a $443 million net loss in the prior year. Adjusted EBITDA loss also fell 13% to $169 million.
Snap continues to project revenue growth between 27% and 39% for the remainder of 2018. The company is expected to release its third-quarter results in early November.
Even at its low price, Snap is unlikely to be a great pickup for most investors. The Snapchat application has stagnated behind its competitors and the best hopes for Snap probably lie in a future acquisition. Investors should look elsewhere for discounts during the current pullback.
