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Snap Misses Expectations Again

Our fair value estimate is intact for this no-moat and very high uncertainty name.

Securities In This Article
Snap Inc Class A
(SNAP)

Total revenue of $182 million was up 21% and 153% sequentially and year-over-year, respectively. Advertisers continue to allocate ad dollars to Snap’s platform as displayed by the firm’s 110% year-over-year growth in average revenue per user, or ARPU. We saw some improvement in the daily average user count, as it grew 5% sequentially and 22% from last year to 174 million. However, in our view, these growth rates continue to show the difficulties that Snap faces when going head-to-head against Facebook’s 250 million Instagram DAUs. We estimate Instagram DAU growth of 17% over the last three quarters, compared with Snap’s 9%.

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About the Author

Ali Mogharabi

Senior Equity Analyst
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Ali Mogharabi is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers Internet and software companies.

Before joining Morningstar in 2016, Mogharabi was a senior equity analyst for Singular Research, where he covered the technology and biotechnology sectors. His previous experience also includes roles as a senior equity analyst for B. Riley & Co., associate analyst for Roth Capital Partners, sales consultant for Oracle, and business development consultant for Aerospike.

Mogharabi holds a bachelor’s degree in economics from the University of California, San Diego; a master’s degree in business administration from University of California, Irvine; and a master’s degree in applied economics from the University of Michigan.

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