Snap (SNAP) Q3 Earnings: What To Expect

Social network Snapchat (NYSE: SNAP) will be announcing earnings results tomorrow afternoon. Here’s what investors should know.

Snap missed analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $1.24 billion, up 15.8% year on year. It was a slower quarter for the company, with underwhelming EBITDA guidance for the next quarter. It reported 432 million daily active users, up 8.8% year on year.

Is Snap a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Snap’s revenue to grow 14.3% year on year to $1.36 billion, improving from the 5.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.05 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Snap has missed Wall Street’s revenue estimates five times over the last two years.

Looking at Snap’s peers in the consumer internet segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Netflix delivered year-on-year revenue growth of 15%, meeting analysts’ expectations, and Coursera reported revenues up 6.4%, topping estimates by 1.2%. Netflix traded up 11.1% following the results while Coursera was down 9.7%.

Read our full analysis of Netflix’s results here and Coursera’s results here.

Investors in the consumer internet segment have had steady hands going into earnings, with share prices flat over the last month. Snap is down 2.7% during the same time and is heading into earnings with an average analyst price target of $12.68 (compared to the current share price of $10.41).

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