Snap slides as it warns on EBITDA, revenues, deteriorating economy; social media peers tumble
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Snap (NYSE:SNAP) has sunk 18% after hours after the company warned that it expects Q2 revenue and EBITDA will fall below its previous low-end guidance from just a month prior.
"Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated," the company says in an SEC filing.
"We remain excited about the long-term opportunity to grow our business. Our community continues to grow, and we continue to see strong engagement across Snapchat, and continue to see significant opportunities to grow our average revenue per user over the long term," the company says.
A memo from CEO Evan Spiegel to employees seen by CNBC also notes that the company will keep recruiting new employees but slow its hiring for the rest of the year; Spiegel still expects Snap will hire 500 new employees before year-end.
Snap's grim assessment of how things have turned over the past month is hitting social peers as well: Meta Platforms (FB) has tumbled 6.9% after hours. Alphabet is lower: GOOG
-4.2%; GOOGL
-4.1%; Twitter (TWTR) is down 4% postmarket; The Trade Desk (TTD) is down 9.3%; Pinterest (PINS) has sunk 9.1%.
Along with its Q1 earnings, Snap had forecast revenue growth between 20%-25%, and adjusted EBITDA between break-even and $50 million.
Before its warning, Snap had an average rating of Buy from Wall Street analysts, Hold from Seeking Alpha authors, and Sell from Seeking Alpha's quant system. Seeking Alpha's quant system has beaten the market in every one of the last 10 years -- see chart.