Jim Cramer expressed optimism about Snap Inc.'s (NYSE: SNAP) stock value on Thursday.
The CNBC "Mad Money" host pointed out the better than expected earnings that Snap has been posting in the last few quarters, saying that "it now makes a habit of smashing the estimates."
According to Cramer, no one trusted Snap initially because it kept missing the numbers, but the company has "earned the benefit of the doubt."
Snap beat the analyst expectations slightly in the third quarter of 2019, reporting a loss of 4 cents per share.
The company reported a 13% increase in daily active users year-on-year, even as it faces increased competition from Facebook Inc. (NASDAQ: FB) and subsidiary Instagram along with new entrant video sharing platform TikTok, and other social media platforms.
JMP Securities analyst Ronald Josey last December projected a 37% revenue growth for Snap in 2020, upgrading its rating to "Market Outperform" with a price target of $20.
Snap's shares traded at $19.75 in the after-hours market on Tuesday, already up 18.83% this year after opening at $16.62.
The stock added 203.53% per share last year after opening at $5.38 following a slump in 2018.
"The company's expected to make 92 cents [a share] in 2023. This thing is trading at only 21 times the outyear earnings estimates," Cramer said, as reported by CNBC.
"That makes it a steal even after this run, but again only if they make the numbers, but I think they are."
Snap is due to report its fourth-quarter earnings for 2019 on February 4.
"If the estimates are too low, this thing's headed into the stratosphere. It's the right stock for this environment," Cramer noted.
"I recommend if you like Snap putting on half your position before the quarter, then if the stock gets hit after the quarter you can go back [and buy more]," Cramer advised.