As Facebook and Instagram owner Meta Platforms Inc. META turns itself around and Pinterest Inc. PINS continues to post revenue growth, Snap Inc. SNAP is still languishing.
The Snapchat parent company, which recorded declining and weaker-than-expected quarterly revenue Thursday, is trying to find its footing in a highly competitive race for online attention and a tough advertising climate that is suffering from Apple Inc.’s AAPL privacy-related changes instituted a couple years ago. Snap has an ambitious vision for the power of augmented reality, but it’s also struggling to stabilize its business in the moment.
Wall Street is less convinced about Snap’s ability to manage what lies before it, sending shares down more than 17% in Friday’s premarket action. That would mark the stock’s fourth post-earnings double-digit percentage decline in as many quarters if it carries through to the close of Friday’s regular session.
About six months ago, Meta executives vowed to move ahead with big spending plans, including in the metaverse, despite a tougher economic backdrop. They quickly changed their tune and started to cheer “efficiency” once investors headed for the hills. Snap is in a tough position in his view, as the “leader in consumer product innovation” with a demanding user base.
Brad Erickson of RBC Capital Markets sees a tough road ahead for the company, even as it invested in new measuring technologies.