Snap Earnings: Still Awaiting an Ad Spending Boost as Users and Engagement Increase

We maintain our Snap fair value estimate of $14. After a 30%-plus decline after hours in reaction to the fourth-quarter results, the shares of this no-moat firm look attractive. Despite a flat user count in North America, Snap’s total user count increased in the fourth quarter. We were pleased with improved monetization in developed markets. We still expect Snap to reach full-year profitability in 2027, driven by user growth, enhanced engagement, improved advertising solutions, and recent cost cuts.