The coronavirus lock-down helped Snap achieve the first positive operating cash flow since the company was founded in 2011. It took them 9 years to produce gains. This was also made possible by doubling advertising revenue. This is astonishing, because Facebook(NASDAQ: FB) and Google (NASDAQ: GOOGL) are losing advertising revenue due to the crisis. Snap should continue to develop positively in the short term. If you bought SNAP at $8 we are sure you are thinking about unloading your shares when the price hits $15. And the sucker that buys SNAP at $15 will find out he made a bad deal once lock downs are over.
Because of the lockdowns, activity on Snapchat is increasing sharply: Overall, users spent 35 percent more time using the app and created over four billion posts a day. In addition, the number of daily active users rose from January to March to 229 million (plus 20 percent). Revenue primarily driven by advertising increased 44 percent to $ 462 million in revenue.
Nevertheless, Snap does not come out of the loss zone. The loss per share is still minus eight cents compared to minus ten cents in the same quarter of the previous year. Overall, the net loss shrinks $ 4 million year-over-year to $ 306 million. EBITDA improved $ 42 million to minus $ 81 million.
Just because majority of stay-at-home stocks such as Microsoft Corporation (NASDAQ: MSFT) or Fiverr International Ltd (NYSE: FVRR) are performing great, it doesn’t mean that Snap will take over the world…because it will not.
If you are thinking about buying shares of Snap Inc (NYSE: SNAP) think again, as SNAP is just a coronavirus fad. Nothing new is created, it is an old service that produced a small spark in the first quarter.
Thanks to Corona, Snapchat will be able to report positive operating cash flow for the first time in its company’s history in the first quarter of 2020. This improved from minus $ 66 million in the prior year quarter to $ 6 million. The social media platform also beats expectations for daily active users and sales. After-market share price rose by over 20%.