Snap’s post-earnings crumble brought it back to pandemic lows. Is it a buy here?
Carl Court

The release of quarterly results sparked a massive selloff in shares of Snap (NYSE:SNAP) last week. Despite an increase in daily active users and revenues, financial figures from the social media giant pointed to deteriorating platform metrics, leading to a sizable loss for the quarter.
The nearly 40% drop that SNAP experienced in a single session brought it to its lowest level since the depths of the pandemic in early 2020. Did the selling spree wash out all the bad news, building a base for bargain hunters to step in? In other words, has SNAP become a buy at these levels?
How low is too low?
SNAP traded near $16.35 prior to its earnings report, rising in six of the seven sessions headed into the release. The news of the earnings report instantly flipped sentiment, prompting a mass investor exodus. The stock plunged 39% on Friday.
Shares continued their downward momentum early in Monday's action, sliding to an intraday 52-week low of $9.66. However, SNAP picked up some buying interest at that point, with the stock stabilizing just below $10.
In its earnings report, SNAP announced a net loss of $422.1M, or 26 cents a share. Meanwhile, revenues advanced 13% from last year to reach $1.11B. However, this top-line growth lagged behind the increase in daily active users, which climbed about 18%. This mismatch suggested that the company was having trouble monetizing its activity.
Even more disturbing to investors, the social media firm indicated that it had difficulty predicting the near-term economic situation. The company declined to provide forecasts for Q3, blaming "uncertainties related to the operating environment."
The earnings report prompted a wave of downgrades for SNAP. For example, Morgan Stanleyâs analyst Brian Nowak moved his rating on Snap to Underweight from Overweight and cut the price target to $8. Wolfe Research analyst Deepak Mathivanan also downgraded SNAP to Peer Perform from Outperform
Bigger picture, SNAP has fallen nearly 79% so far in 2022. Meanwhile, its decline has reached 84% over the past 12 months. The stock came public through an IPO priced at $24 a share. It peaked at $83.34 late last year but now sits more than 58% below its IPO price.
The recent slide also took SNAP to its lowest levels since March 2020, when the initial COVID shutdowns caused the overall market to tank. At that point, the stock reached a low of $7.89. Back in 2018, the stock briefly dipped below $5 -- its lowest level since coming public in 2017.
SNAP's results put pressure on others in the social media and internet space. This included declines in Meta Platforms (META), Alphabet (GOOG) (GOOGL) and Pinterest (PINS). Meanwhile, Twitter (TWTR) traded on its own results and the ongoing drama surrounding its broken deal to be acquired by Elon Musk.
META and GOOGL will announce their results later this week.
Is SNAP a Buy?
Going into the earnings report, SNAP had a strong backing on Wall Street. Of the 41 analysts surveyed by Seeking Alpha, 13 have a Strong Buy rating, with six others giving the stock a Buy.
However, SNAP has long received skeptical treatment from a sizable number of analysts. That uncertainty is exemplified by the 20 analysts who have issued Hold ratings. At the same time, one analyst labeled the stock as a Sell and another one issued a Strong Sell.
Meanwhile, Seeking Alphaâs Quant Ratings agree with the Wall Street's bears. The system for grading quantifiable data gives the stock an F for both valuation and momentum. The Quant Ratings also assigned the stock a D+ for profitability. This is mitigated somewhat by a B+ for growth.
See the breakdown below:

Seeking Alpha contributor Paul Franke sees opportunities with SNAP as he refers to the stock in a bottom fishing position. Franke outlines that SNAP is trading at its lowest valuation ever on trailing operating stats, after a momentous Big Tech crash in prices. The Asian Investor, another SA contributor, view SNAP as a hold, stating that buying the stock was a huge mistake.