You can’t tell by looking at the stock chart, but Snap appears primed for a turnaround. With so many eyeballs on the platform and so many discussions taking place about things to buy and places to go, digital ad dollars are bound to head Snap’s way as the macro environment improves. In turn, Snap’s next-generation user base will be impossible for advertisers to ignore. This is a powerful statistic because it means the company has a stranglehold on most future consumers. In more than 20 countries, Snap reaches 90% of the 13-24-year-old population. Still gaining traction in the market, Chat, Spotlight and Snap Map are poised to become bigger parts of the multiyear growth story. Snap has stayed in the mix by evolving from its flagship offering to an ecosystem that’s really five platforms in one. They are capturing the creative minds of users globally and creating new revenue streams.
New features like Lenses, Dynamic Stories and AR shopping are on trend with emerging technologies. This shows that Snap’s predominantly younger user base still loves the art of the selfie - and that the company is doing its part to keep the brand fresh and engagement high. Last quarter, daily active users rose by 57 million - a 19% year-over-year improvement. As they add news ones, others get kicked out - but not Snapchat. Social media users tend to use multiple apps. Even with the emergence of TikTok and other challengers, Snapchat is a mainstay.
One overlooked constant during Snap’s plunge is the relevance of the platform in the post-pandemic economy. Still nowhere near the glory days, but re-accelerating growth should be a welcomed development. By the back half of next year, Wall Street sees 7% and 13% quarterly growth. While perceived as concerning by the market, this has formed a new base from which Snap can grow over the next few years.Īfter a likely setback again in Q4, revenue growth is forecast to pick back up in 2023. Last year’s quarterly revenue growth figures of 42% to 116% are being replaced by minimal growth like the 6% recorded in Q3.
The good news is that comparisons to the hyper-growth period will soon fade away like a Snap video.
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