Snap (SNAP) reports fourth-quarter results Thursday, coming at a time the company has been hit by shifts in the digital advertising ecosystem, where it derives almost all of its revenue. Snap stock is down about 57% since its third-quarter earnings report.
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Another social media company that reports earnings Thursday is Pinterest (PINS). Both companies will report after the market close.
Snap is the owner of Snapchat, a multimedia smartphone app people use for sharing images and videos. Pinterest is a platform for people to buy and sell original handmade goods.
Analysts expect Snap to report adjusted earnings of 10 cents per share, compared with an 8-cent loss in the year-ago period. Wall Street sees revenue at $1.2 billion, up 32%.
Snap stock has been in free-fall since reporting third-quarter results that missed estimates, as did the outlook. Snap shares plunged nearly 27% in reaction to the news.
The company pointed a finger at changes Apple (AAPL) made to its smartphone operating system. Apple initiated privacy controls that made it harder to track consumer behavior and disrupted targeted advertising.
Also hurting ad spending was supply-chain disruptions. Online retailers that could not meet holiday season demand due to product shortages were advertising less.
Analyst Views On Snap Stock
“Over the past couple of years, Snap has dramatically improved its operational execution, successfully leveraged new innovations and enhanced its ad tech stack,” Monness Crespi Hardt analyst Brian White wrote in a note to clients. “However, the longevity of the disruptions experienced in the latter part of 2021 remains unclear and valuation elevated.”
Credit Suisse analyst Stephen Ju has a price target on Snap stock of 81, which is down from 104, with a rating of outperform.
“Our checks indicate ongoing headwinds particularly among smaller advertisers,” Ju wrote in his note to clients.
Snap stock is down 4% to 32.25 during afternoon trading on the stock market today.
Pinterest, when it reports fourth-quarter results, is expected to show an adjusted profit of 45 cents a share, compared against 43 cents. Analysts see revenue at $827 million, up 15%.
“Investor sentiment on PINS remains heavily depressed as expectations are for another miss on monthly active users,” RBC Capital Markets analyst Brad Erickson said in a note to clients.
He has a price target on Pinterest stock of 51 and a rating of sector perform.
Pinterest stock dropped 8.7%. near 27.40.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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