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Snap plummets after missing earnings expectations - YouTube
Channel: CNBC Television
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shares of a snap plunging after hours on
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an earnings miss down more than 26
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currently on pace for the second biggest
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drop since going public the conference
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call just wrapped up moments ago i know
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karen wants to hear the details let's
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get more to more on that with fast money
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friend gene munster of loop ventures any
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highlights from the call gene that you
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can bring us as we were here on the air
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as it was going on
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courtney is a small investor in snap it
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was a total disappointment
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lack of confidence in lack of visibility
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that was one piece that really jumped
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out at me is they just simply don't have
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visibility into the business they said
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they will regain revenue growth when the
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macro stabilizes which is a code for uh
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we don't know what's the trajectory of
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our
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uh how bad can this get just to put to
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some perspective on it is there's been a
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lot of focus about the 18 growth in the
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september quarter and they're talking
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about that being flat now but we have to
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fast forward to what's going to happen
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with estimates in december next year the
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street before this is looking for 22
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growth in december and 33
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next year i suspect that they will kind
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of gravitate back to 5
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for december and maybe five percent for
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next year so i think that the take away
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the biggest most simple takeaway is that
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it is a combination of the macro and
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competition that is softening demand to
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a point where they simply don't have
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visibility
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hey gene it's karen thanks for being on
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so how do you think about valuing this
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stock
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what are the metrics what do you do
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at this point it's
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very difficult there is a revenue per
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user basis you could look at it from
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from that metric
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but the challenge with that is we don't
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know what the revenue is going to be
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and i think this is more complicated
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than what we're going to see next week
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coming from facebook from meta and from
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google but to anterior question is that
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i suspect that ultimately the numbers
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are going to probably come down by 25 30
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percent and
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i think that the multiple is going to
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continue to compress until investors
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have at least a glimpse that in a
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quarter out that revenue is going to
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start to re-accelerate so i don't know
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where the bottom is here over the next
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quarter but i suspect and i want to just
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to leave just one
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give them fair credit around the
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valuation question ultimately where this
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is going
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is this is bad
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but it's not uh it could have been much
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worse because they did grow daus up 18
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it was up 18 in the march quarter they
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grew impressions by nine percent
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typically when you think about a social
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platform what is most important is for
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them to be growing users and so usually
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you take that over revenue growth
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because if you factor in that eventually
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they're going to figure out how to
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monetize so i would say when we think
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about a floor evaluation i think it is
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uh important to recognize that the
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platform the engagement is improving
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it's just they're having a really hard
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time turning on that monetization
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and i was just going to ask you sort of
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that very balanced question gene it
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looks like those daily active users were
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better than what the street had expected
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but the current quarter revenue guidance
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was really disappointing as you try to
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evaluate what you want to do here you
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said you're a small investor are is are
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the odds just too stacked against snap
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at this point to build into the position
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even at these levels
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or is the daily active user account
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encouraging enough to nibble at this one
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i'm
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i'm gonna politely sidestep the question
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and uh say that we're thinking more
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about 2023 right now and haven't
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answered that question at this point
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it's pretty fresh it's pretty raw right
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now
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but that is going to be uh kind of make
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our decision see where it trades
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tomorrow uh based on that uh we are
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thinking a lot about what's going to
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happen next week related to meta and
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google and if i may just kind of uh
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that's something that i feel is a little
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bit more actionable from from our
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perspective and
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ultimately uh the street is looking for
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four percent revenue growth for
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september now snap just uh guided to uh
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flat for september
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i think that probably implies is going
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to imply that the street that uh there's
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probably a little bit of downside to
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meta but i do believe i just uh
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as i think about all this i think about
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you know what hasn't happened yet let's
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try to prepare for what's happened
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what's going to happen i suspect that
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there's a little bit of downside to
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meta and google but not as much as what
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we've seen here with snap
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got it thank you so much for joining us
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gene jumping on after listening to that
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call and giving us some of your thoughts
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and headlines appreciate that very much
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steve grasso you were nodding at one
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point when gene was talking i think it
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might have been when he was talking
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about the arpu there i'm going to give
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you a moment to jump in
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yeah i i think it was uh it's pretty
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interesting that that his point about
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dau is growing at 18 but they haven't
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figured out how to monetize it it
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actually reminds me of the twitter story
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long before elon musk even whispered
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twitter's name and they couldn't
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monetize and they couldn't grow daus
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so i you know i i think for me this is
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definitely a
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you know one of those things that needs
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a little more we talked about the
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three-day rule but if the three-day rule
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holds that 1190 level i think you can
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actually start acquiring a little bit of
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a position in snap oddly enough
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at the 1190 level so right now we're
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just hanging on above 12 right now in
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the after hours but down 26 percent
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alphabet's the name i'm sure karen will
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agree with this probably trading 111 or
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so in the after hours you start doing
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the math company that's now trading at a
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market multiple even with everything
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that's going on probably still high
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teens eps growth i would think you back
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out the cash it's even cheaper right you
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add back the cash i guess you should say
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it's even cheaper than that so they have
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more revenue streams more diverse a
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company i mean if you want to be in the
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space i think karen would agree
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alphabet's the name to be in will you
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agree absolutely yes the biggest
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position for all the reasons that guys
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said so i mean the just evaluation for a
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company that absolutely is far superior
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than an average market multiple states i
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just want to reiterate ad spent
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headwinds in the cyclicality attached to
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it we know spending's pulled back i mean
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how much that's already been priced in
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and even if more gets priced in it's
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such a different story in terms of uh
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the advertiser base at meta and and
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google i mean they're monsters where
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else are you gonna go these are the
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biggest advertising companies in the
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world and yes we know what's going on
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with the economy but at some point it
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becomes an opportunity for those two i'm
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not chasing snap here
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you
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