One-glance verdict
Within fair range
$7.51 our estimate vs market $6.34
Wall Street consensus: $7.44 (-0.9% lower than our fair-value estimate)
16% below our estimate
Fundamentals snapshot
Snap Inc.
SNAP · NYQ · Communication Services · Internet Content & Information
Current price
$6.34
52-week range
$3.81 - $9.13
Market cap
$10.72B
Balance sheet
Distressed
-4.36x Concerning
Net debt $1.57B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 7.1% last year.
- Reward Free cash flow was positive in 5/10 years.
- Risk Net debt grew 409.2% over 3 years.
- Risk Return on equity was -15.6% last year — the company lost money on shareholders' equity.
What this company does
Snap Inc.
Snap Inc. is the company behind Snapchat, a popular app where people send short videos and pictures to each other. Most of its money comes from selling ads on the app, which matters because it shows how well they can reach and engage users to attract advertisers.
How the company got here
Snap Inc. started in 2010 as Snapchat, a mobile app focused on sending disappearing photos and videos. This unique approach to communication quickly gained popularity, especially among younger users who enjoyed the playful and ephemeral nature of the messages. The company officially changed its name to Snap Inc. in 2016, signaling an ambition to be more than just a messaging app. This rebranding coincided with efforts to expand into hardware and augmented reality, laying the groundwork for its future ventures.
What it actually does
At its core, Snap Inc. is a technology company that connects people through its popular app, Snapchat. Think of it as a digital playground where users can share moments through photos and short videos, often enhanced with fun filters and lenses. Beyond messaging, Snap Inc. also develops augmented reality (AR) experiences and offers advertising solutions for businesses looking to reach its large user base. The company aims to empower people to express themselves, live in the moment, and learn about the world.
Snapchat
This is Snap Inc.'s flagship product, a social media app centered around visual communication. Users send "snaps" – photos or short videos that can disappear after being viewed – to friends. It also features "Stories," collections of snaps that last for 24 hours, and "Spotlight," a platform for short-form video content similar to TikTok. The primary way this segment makes money is through advertising, where businesses pay to show ads within users' Stories or on the Spotlight feed. This segment represents the vast majority of Snap Inc.'s revenue.
Augmented Reality (AR) Products
Snap Inc. is a leader in augmented reality, which is technology that overlays digital information onto the real world. This includes the popular "Lenses" within Snapchat that can transform a user's appearance or add digital objects to their surroundings. They also offer "Spectacles," smart glasses that can capture photos and videos, and are increasingly focused on AR advertising, where digital ads are integrated into the real-world view through the app. Revenue from this area comes from businesses paying to create AR experiences and ads, as well as sales of Spectacles, though it's a smaller portion of the company's overall income compared to Snapchat advertising.
Subscription Services
Snap Inc. offers premium subscription services like "Snapchat+" and "Lens+" that provide users with exclusive features and early access to new tools. For example, Snapchat+ might offer unique app icons, the ability to see who rewatched your story, or special ways to pin your best friends. These services are designed for the most engaged users who want an enhanced experience. The revenue generated here comes directly from users paying a monthly fee, making it a growing, albeit still relatively small, income stream for the company.
What management is betting on now
Snap Inc.'s leadership is heavily focused on growing its user base and increasing engagement within the Snapchat app. A key priority is expanding its advertising business by making it easier for businesses of all sizes to advertise and by developing more sophisticated ad tools. They are also investing significantly in augmented reality, aiming to make AR a more integral part of daily life through innovative features and hardware. Furthermore, the company is working to improve its financial efficiency, focusing on profitability and sustainable growth by carefully managing costs and optimizing revenue streams.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$71.83M
FY2024 Q4
$182.36M
FY2025 Q1
$114.40M
FY2025 Q2
$23.79M
FY2025 Q3
$93.44M
FY2025 Q4
$205.56M
FY2026 Q1
$286.01M
FY2026 Q2
$120.54M
Revenue
$1.60B
Net income
$-163.96M
Diluted EPS
-0.10
Operating cash flow
$176.21M
Free cash flow
$120.54M
Fetching…
Sources
Revenue
$1.53B
Net income
$-88.95M
Diluted EPS
-0.05
Operating cash flow
$326.78M
Free cash flow
$286.01M
Fetching…
Sources
Revenue
$1.72B
Net income
$45.21M
Diluted EPS
0.03
Operating cash flow
$269.58M
Free cash flow
$205.56M
Fetching…
Sources
Revenue
$1.51B
Net income
$-103.54M
Diluted EPS
-0.06
Operating cash flow
$146.49M
Free cash flow
$93.44M
Fetching…
Sources
Revenue
$1.34B
Net income
$-262.57M
Diluted EPS
-0.16
Operating cash flow
$88.49M
Free cash flow
$23.79M
Fetching…
Sources
Revenue
$1.36B
Net income
$-139.59M
Diluted EPS
-0.08
Operating cash flow
$151.61M
Free cash flow
$114.40M
Fetching…
Sources
Revenue
$1.56B
Net income
$9.10M
Diluted EPS
0.01
Operating cash flow
$230.63M
Free cash flow
$182.36M
Fetching…
Sources
Revenue
$1.37B
Net income
$-153.25M
Diluted EPS
-0.09
Operating cash flow
$115.87M
Free cash flow
$71.83M
Fetching…
Sources
Is it cheap or expensive?
Fair value $7.51 vs current price $6.34
Wall Street consensus is the average analyst price target: $7.44 (-0.9% lower than our fair-value estimate).
Our most-likely fair value is $7.51 a share — about 18.4% away from today's price of $6.34, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $1.6B. Interest coverage -4.4x.
Net debt
$1.57B
Interest coverage
-4.36x
Snap Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
SNAP
BASELINE
Snap Inc.
Total debt $4.23B Interest coverage -4.36x This is the baseline the peer rows are being compared against.
Total debt $1.20B Interest coverage 21.03x This peer still has a real interest-payment cushion, while SNAP does not.
Total debt $114.84B Interest coverage 71.48x This peer still has a real interest-payment cushion, while SNAP does not.
Total debt $3.67B Interest coverage 6.17x This peer still has a real interest-payment cushion, while SNAP does not.
Total debt $506.44M Interest coverage 70.90x This peer still has a real interest-payment cushion, while SNAP does not.
What you should know
The case for and against SNAP
2 Rewards
2 Risks
Rewards
-
Revenue grew 7.1% last year.
-
Free cash flow was positive in 5/10 years.
Risks
-
Net debt grew 409.2% over 3 years.
-
Return on equity was -15.6% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
8.14x
P/B
5.53x
P/S
1.69x
EV/EBITDA
-84.00x
PEG ratio
508.87x
Profitability
How much profit each dollar creates
Gross margin
57.3%
Operating margin
-2.6%
Net margin
-4.9%
ROE
-15.6%
ROA
-2.7%
Health
Liquidity and balance-sheet strength
Debt / equity
2.19x
Current ratio
2.94x
Quick ratio
2.72x
Total debt
$4.23B
Total cash
$2.66B
Growth
How the business has been compounding
Revenue TTM
$6.35B
Revenue 5Y CAGR
9.6%
EPS TTM
-0.18
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$919.06M
Free CF TTM
$437.19M
FCF margin
6.9%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
—
Last ex-div date
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