Snap (SNAP) reported third-quarter results late Tuesday that smashed revenue estimates and also beat on earnings. Snap stock soared to a record high.
The social media company reported an adjusted profit of 1-cent per share on revenue of $678 million. Wall Street expected an adjusted loss of 5 cents on revenue of $550.5 million. Revenue jumped 52% from the year-ago period.
Snap stock jumped 20%, near 34.20, during after-hours trading on the stock market today. Snap stock hit its previous record of 28.86 on Monday.
Based in Santa Monica, Calif., Snap is the owner of Snapchat. It’s a smartphone app that can manipulate and enhance images and videos in numerous ways, which can then be sent to other Snapchat users. It also has an expanding lineup of video content and games and is popular with the under-30 crowd.
Snap reported daily active users of 249 million, up 18% from the year-ago period. The company had initially projected users in the range of 242 million to 244 million. Analysts expected 243 million.
“We’re excited about the growth of our business in the third quarter as we continue to make long-term investments in our future,” Chief Executive Evan Spiegel said in written comments with the earnings release. “The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us.”
The Snap earnings surprise fueled other social media stocks. Facebook (FB) climbed 3% in after-hours trading, near 275.64. Twitter (TWTR) jumped 4.6%, near 48.50. And Pinterest (PINS) surged 5.8%, near 47.95.
Prior to the earnings report, Snap stock was up about 70% this year.
In a report to clients Tuesday, Jefferies analyst Brent Thill said he believes previous guidance set by Snap was “overly conservative given that our checks point to accelerating ad spend each month.” He raised his price target on Snap stock to 33, from 30, with a rating of buy.
Checkup On Snap Stock
The IBD Stock Checkup tool shows that Snap has an IBD Composite Rating of 83 out of a best-possible 99. The rating means Snap stock currently outperforms 83% of all stocks. That’s in terms of the most important fundamental and technical stock-picking criteria.
It has a Relative Strength Rating of 93. The rating shows how a stock’s price performance over the prior 52 weeks holds up against all the other stocks in IBD’s database.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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