SNAP stock plunged after weak 2Q FY2025 earnings and disappointing 3Q outlook, largely driven by pricing challenges on its ads platform. AI and ML investments, along with Spotlight and Snapchat+, are driving early engagement gains but need more time to drive higher revenue growth. AR remains a key long-term growth driver, with over 350 million users engaging daily, supported by a fully integrated AR computing stack that differentiates itself from peers.

Snap (SNAP 0.92%) owns the popular Snapchat social media platform. Its stock is down 91% from its peak in 2021, which is the year Apple adjusted some of its privacy rules to make it harder for app developers to track their users across the internet.

Snap (SNAP 0.92%), the parent company of social media platform Snapchat, took a hard hit following its second‑quarter earnings release earlier this month. Shares tumbled, driven by worries about slowing growth, execution missteps, and a worsening net loss.

It's been a rough past few days for Snap (SNAP 0.99%) shareholders. The Snapchat parent's stock is trading down more than 20% since posting its second-quarter numbers last Tuesday, in fact, and still testing lower lows.

Snap appears undervalued given its improving fundamentals, despite underperforming during a broader market rally and recent negative sentiment. Key metrics show strong engagement and user growth, with revenue and adjusted EBITDA both rising significantly year-over-year. Snap's new subscription business, with 15 million paying users and rapid growth, is making its revenue streams more resilient and diversified.

Snap's user and subscription growth is positive but too slow to drive a meaningful pivot toward profitability in the near term. Ad revenue growth guidance is optimistic, but macro headwinds and a lack of immediate catalysts limit upside potential. Valuation appears cheap, but ongoing losses and high execution risks make Snap a potential value trap rather than a deep value buy.

Snap missed bottom and top line estimates for Q2 on Wednesday, but only marginally. The 17% drop in share price seems exaggerated. The social media company continued to grow its revenues and daily active users at 9% Y/Y. ARPU in Snap's core market is still growing and indicates healthy user monetization. However, Snap's losses increased Y/Y, leading to the creation of a new negative sentiment overhang.

Snap's post-earnings slump is overdone; the market is ignoring strong subscription growth and undervaluing future revenue streams. The social messaging subscription business is gaining traction, with nearly 16 million subscribers and new higher-priced tiers like Lens+ and Platinum boosting potential revenue. Despite weak ad growth, Snap's Q3 guidance beats consensus, and the stock trades at a deep discount compared to peers like Pinterest and Reddit.

This was hardly a good week to be a Snap (SNAP -2.89%) shareholder, as the social media company's shares were getting rocked after it published its second-quarter earnings report. Outside of that, the company announced it was going to the well in an effort to raise more capital.

SANTA MONICA, Calif.--(BUSINESS WIRE)--Snap Inc. (NYSE: SNAP) announced today the pricing of $550 million aggregate principal amount of 6.875% senior notes due 2034, or the notes, in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended, or the Securities Act. The sale of the notes is expected to close on August 12, 2025, subject to customary closing conditions. The notes will be senior unsecured obligations of Snap and will be fully and.