econintersect .com

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 17 March 2017

Snapchat Still Has Some Growing Up To Do

Written by ,

-- this post authored by Martin Armstrong

Snapchat went public with its IPO 02 March, 2017 (NASDAQ:SNAP), producing a peak company value of around 40 billion dollars one day later, making it the biggest U.S. tech IPO since Facebook. Econintersect has added commentary to the end of this post.

While this initial valuation is impressive, some are questioning the longevity of an app which relies heavily on users at the younger end of the scale. As the chart below shows, when compared to Twitter and Facebook, the age spread of Snapchat users is much more weighted to the 18-24 years group (Comscore only surveyed adults). Facebook enjoys a much healthier spread of U.S. smartphone owners. Although Twitter users are also rather more youthful, the differences aren't anywhere near as pronounced as with Snapchat. It could be that Snapchat has some growing up to do if it is to thrive in the long-term.

This chart shows a breakdown of Snapchat, Facebook and Twitter app users in the U.S. by age group.

Infographic: Snapchat Still Has Some Growing Up To Do | Statista You will find more statistics at Statista.

Notes added by Econintersect: SNAP has been declining persistently since topping out intraday 03 March 2017. So the mrket valuation fo the company has been moving back toward the $24 billion implied by the IPO offer price of $17. (Chart from


The financial data sumarized below by Google shows why there is much skepticism about SNAP's future: As fast as revenue has grown it has not come close to making the company profitable. In fact the last two quarters have shown a marked flattening of profit margin and operating income improvement at loss levels of -135% and -125%, respectively.

Click for larger image.


If no improvement in the quest for profitability occurs in the next quarterly report due at the beginning of June, it is hard to see how SNAP can fail to break below the IPO offering price of $17, and stay well below that level for some time.

And, the way things are trending, it may not take until June to break the IPO price. It could happen as early as next week.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Investing

Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved