Wall Street fears that Snapchat is falling behind Facebook after Devastating First Earnings Report


Facebook’s shadow continues to loom over Snapchat as its main parent company released its earnings report shows devastating numbers.

Snapchat Investors treaded with much caution in the previous session as shares of the Social media app took a beat down after the company released its first quarter earnings report, and revealed that the company didn’t manage to reach the estimates across the board.

Even after a drop of more than 20% that would normally bring out the value buyers on Wall Street, Snapchat’s ratings look bearish instead of being a hot new Social media stock.

Investors were split up with 17% of then say that snapchat is a sell and 47% say that it’s still a stock worth to hold on to that might result to better returns and another 37% of analysts who’s still consider it a buy.

Snapchat Inc., is widely known for its disappearing messages though it has evolved to a much more complex social media platform. The platform was seen with massive losses and saw user growth continue to slow down in the first three months of the year. The Company’s revenue was found below Wall Street’s expectations in the first released earnings report since its initial public offering of stock.

To put it into numbers, Snapchat reported to have 166 million daily active users in the latest quarter which was an increase of 36 percent compared to the previous year. While Facebook users grew to 552 million, which is three times more than Snapchat.

About $2 billion of Snap's $2.2 billion net loss in the January-March period was for IPO-related stock compensation costs. Facebook had similar costs, about $1.3 billion. In the session, Snapchat’s stock was as $5.50 or 24 percent to $17.48 in after-hours trading.


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