WEBULL

Snap (SNAP) Valuation Check as New Ad Tools Boost Conversions and Daily Users Hit Record High

Simply Wall St · 1d ago

Snap (SNAP) just rolled out new advertising tools, including Sponsored Snaps and Smart Campaign Solutions, and early data shows stronger ad conversions alongside a record 477 million daily users, leading investors to reassess the beaten down stock.

See our latest analysis for Snap.

Even with the buzz around these ad upgrades, Snap’s share price has a year to date share price return of negative 29.63 percent and a one year total shareholder return of negative 36.72 percent. However, the 90 day share price return of 8.65 percent suggests early momentum may be rebuilding as investors reassess growth versus risk at 7.91 dollars a share.

If Snap’s rebound story has your attention, this could be a good moment to compare it with other high growth tech names using high growth tech and AI stocks.

With the stock still trading well below analyst targets despite faster revenue and profit growth, are investors overlooking a genuine turnaround, or is Snap fairly valued as the market cautiously prices in its next leg of growth?

Most Popular Narrative Narrative: 20% Undervalued

With Snap’s shares last closing at 7.91 dollars against a narrative fair value near 9.84 dollars, the valuation case leans on future margin transformation rather than current profits.

Monetization progress in subscription products such as Snapchat+ and Lens+, alongside growing engagement with Spotlight and creator driven content, is diversifying Snap's revenue base and improving net margin potential by capturing higher margin direct to consumer and content revenue streams.

Read the complete narrative.

Curious how modest revenue growth assumptions can still justify a richer future earnings multiple than today, while keeping losses in the rear view mirror? The narrative’s roadmap blends rising margins, stronger per user monetization, and a bold profit re rating story into one valuation case. Want to see exactly how those moving parts stack up over the next few years? Dive in and test whether the projected earnings power really supports that higher fair value.

Result: Fair Value of $9.84 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent losses and fierce competition from Meta, Alphabet, and TikTok could derail Snap’s margin expansion story if user engagement or ad share weakens.

Find out about the key risks to this Snap narrative.

Build Your Own Snap Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a fully custom view in minutes: Do it your way.

A great starting point for your Snap research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Ready for more investment ideas?

Snap might be your starting point, but you’ll raise your game by lining it up against other compelling opportunities from our smartest screeners on Simply Wall St.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.