... [+]After a nearly picture-perfect run over the past two years, Snap is worth $100 billion, its value quadrupled. But what if that was a low—perhapsThe company held its first Investor Day on Tuesday since going public in 2017. These gatherings are as common as Christmas in the corporate world, a time for publicly traded businesses to outline future plans and set expectations. Most of them detail slow, incremental change. Not Snap’s, though.
Spotlight, a feed of user-generated content meant to compete with TikTok, had 100 million monthly active users last month and 175,000 submissions—signaling a strong start for the new section of Snapchat. Importantly, as Spotlight continues to grow, Snap expects it will be able to place its most lucrative ads there, a significant boost to revenue.
Snap’s map feature is one of its least talked-about features, but the company thinks the geolocation part of its app is how it’ll attract a large amount of small- and medium-sized businesses to Snapchat. It already has 35 million on the platform. Adding these types of companies to its platform is, of course, what helped Facebook push up its audience and revenue during the 2010s.
Right now, Snap trades for over $70 a share at roughly 40 times sales, an indicator that investors are willing to pay up considerably for a company they expect will grow greatly. It would be hard but not impossible for Snap to maintain this loft valuation. A more conservative assumption might be 20 times sales, approximately the average valuation fetched by the stock over the past two years.