My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Having put the theory to test on (1) credit cards companies, (2) EV company, (3) entertainment company (4) technology companies and (5) financial institutions; its time to try it out on a Social Media company, no ? LOL
Gonna put $Snap Inc(SNAP)$ to the test & see if it fits the bill.
Sidetrack: Stocks that I have covered so far. Interested ? Click to read. Please "Like" to show some love okie ? Thanks !
- General Motors
- Visa Inc.
- Tesla Inc.
- Netflix .
- Mastercard.
- Intel.
- Microsoft.
- JP Morgan.
- Morgan Stanley.
- An American multi-media company
- Found in Sep 2011 (an 11 yo young company)
- Founders were Evan Spiegel, Bobby Murphy and Reggie Brown
- Its core activities - developed & maintains technological products and services, namely Snapchat, Spectacles and Bitmoji.
- Apps original name was Picaboo, then christened as "Snapchat" and finally on 26 Sep 2016 renamed as "Snap" until present day.
- It was publicly listed in 02 Mar 2017 at $24 per share; making its market cap $33 Billion on its debut
- It grew to its current size thru very strategic acquisition of business-related companies and integrated their products seamlessly with Snap
In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did Snap Inc fare ?
Current stock price < 02 Feb 2022 stock price by -67.66%, Dismal !!
Snap Inc - Summary
- Total Revenue came in at $1.299 Billion vs $1.297 Billion (Q4 2021); thats a +0.1% QoQ.
- Net loss (GAAP) came in at -$288 Million vs $22,550 Million (Q4 2021); thats a -1,379% QoQ. ** "Note" - is net loss is improving quarterly in Year 2022 (Refer to below chart).
- Loss per share (GAAP) was -$0.18 vs $0.01 (Q4 2021); thats a -1,900% QoQ.
- Earnings per share (non GAAP) was $0.14 vs $0.22 (Q4 2021); thats a -36.36% QoQ
Snap Inc - Net Income / Loss - Quarterly charting - gradual improvement ?
Snap Inc - Revenue breakdown by Region
- As Snap is a social media company, its viability will be based on its ability to penetrate every mobile phone users; estimated to be 7.26 Billion handphones worldwide.
- Above breakdown clearly shows that Snap's growth outside of US is still relatively healthy.
- However its prospect in the US is not looking bright
- Could this be a case of Tik Tok (English version of China's Dou Yin apps) being a darling and dampener in the socal media sphere ?
Snap - Operating Statistics
- As with any social media company / apps - a key performance indicator is the number of daily active users (DAU)
- Snap's Q4 2022 DAU came in at 375 Million vs 319 Million (Q4 2021); thats a +17.55% gain in customer base.
Snap's CEO on Q4 2022 Results
This quarter we took action to further focus our business on our 3 strategic priorities; growing our community and deepening their engagement with our products, re-accelerating and diversifying our revenue growth and investing in augmented reality. The growth of our community to 363 Million daily active users, an increase of 19% YoY continues to expand our long-term opportunity. Snap, CEO, Evan Spiegel...
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Is SNAP - Both A Good Price and Good Company ?
In his letter to shareholders, CEO Evan Spiegel has raised the following pointers :
- Refocus Snap's investments to support its 3 strategic priorities: (1) grow the community & deepend members' engagement with Snap's products, (2) accelerating and diversifying Snap's revenue growth, and (3) investing in the future of augmented reality.
- Snap has an outreach of > 75% of members in the "13- to 34 year-olds" category; in more than 20 countries.
- Whatsmore, the 20 countries represent > 50% of Global Digital Advertising spend.
- Continued on the path to sustainable profitability by generating $378 million of adjusted EBITDA in 2022, that is 3rd consecutive year of positive adjusted EBITDA.
- Generated $55 Million of free cash flow (FCF) in 2022; that is 2nd consecutive year of positive FCF. See below diagram for details.
- Q4 2022 also saw the introduction of a subscription based account Snapchat+; that has grown to > 2 Million subscribers in the quarter.
- It is also investing in Snap's augmented reality (AR) platform, making significant progress in building a differentiated AR offering that provides significant value to Snap's community, developers, and businesses.
Snap's - Free Cash Flow table
- Do you think Snap will be able to better and improve itself in 2023 ?
- Do you think with the impending Covid & Lock Down complete removal / abolishment; it will help everyone to get back to pre-Covid pandemic situation ?
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Comments
So is snap a good option?