Why is Snapchat Stock so Cheap?

Not as big as Facebook, but lots of upside for a small social network.

Andrew Willis 4 November, 2022 | 6:17AM
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Andrew Willis: Poor top-and-bottom line results, restructuring and office closures may have caught the market’s eyes when it comes to Snapchat (SNAP). But the company’s user base has been growing – and the outlook improving.

Senior equity analyst Ali Mogharabi sees some costs ahead in research, development and marketing to attract and retain users, as well as bring more advertisers to Snapchat in the medium and long term.

Looking ahead, we see the potential for profitability by 2026. And while Snapchat may never reach the size of Facebook (META) in the future, reaching a similar degree of user monetization would be promising for patient investors.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Meta Platforms Inc Class A471.91 USD-0.28Rating
Snap Inc Class A16.05 USD0.19Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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