Snapchat Pre-earnings Analysis and Projections


Chart done on daily timeframe. Shares of Snapchat have enjoyed a rally over the last quarter after the company posted better than expected earnings in Q3. Snapchat posted positive revenue growth for the first time after falling behind in Q1 and Q2, giving investors hope that the company is making a small come back, but they will be tested soon when their earnings come around again. Investors are looking for another quarter with revenue growth, but will also be looking for improvement in net income. Although the company’s revenue growth last quarter, their losses widened, nearly guaranteeing that 2023 will be another losing year, adding to their seven year “streak”. The company’s balance sheet has a positive ratio, but free cash flow is fairly low, placing them in a high risk long term outlook. 

Given the overall market momentum and aggressiveness, SNAP shares may still spike higher on earnings regardless of what they post. The buyers who have bought it up since October are holding these levels strongly and will likely want more. We’re looking for a target of 21.00-22.00 after the 18.00 breakout.