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Snap (SNAP) Gains But Lags Market: What You Should Know

This story originally appeared on Zacks

Snap (SNAP) closed the most recent trading day at $79.37, moving +0.98% from the previous trading session. This change lagged the S&P 500’s 1.21% gain on the day.

Prior to today’s trading, shares of the company behind Snapchat had gained 5.24% over the past month. This has outpaced the Computer and Technology sector’s gain of 1.28% and the S&P 500’s loss of 0.9% in that time.

Wall Street will be looking for positivity from SNAP as it approaches its next earnings report date. The company is expected to report EPS of $0.06, up 500% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.09 billion, up 59.98% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.34 per share and revenue of $4.21 billion. These totals would mark changes of +666.67% and +67.96%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for SNAP. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SNAP is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, SNAP is holding a Forward P/E ratio of 231.18. This represents a premium compared to its industry’s average Forward P/E of 58.18.

The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 207, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNAP in the coming trading sessions, be sure to utilize Zacks.com.

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