SNAP Should I Buy
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Snap Inc (SNAP) is not a strong buy for a beginner, long-term investor at the moment. While the company has shown significant financial improvement in its latest quarter, the technical indicators suggest a bearish trend, and the stock is currently oversold. Analysts' ratings are mixed, with several firms lowering price targets, and the options data indicates limited bullish sentiment. For a long-term investor, it may be better to wait for clearer signs of recovery or stabilization before committing funds.
The technical indicators for SNAP show a bearish trend. The MACD is below zero and negatively contracting, the RSI indicates the stock is oversold at 10.128, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with the next support at 4.899 and resistance at 5.842.
Financial performance in Q4 2025 showed strong growth, with revenue up 10.22% YoY and net income up 396.75% YoY.
Shift in revenue mix towards higher-margin subscription income could provide stability in the long term.
Analysts have lowered price targets significantly, citing challenges in ad revenue growth and user base decline.
Regulatory overhangs and lack of clarity on AI partnerships and the Perplexity deal.
Technical indicators are bearish, and the stock remains oversold.
In Q4 2025, Snap's revenue increased by 10.22% YoY to $1.716 billion, net income surged by 396.75% YoY to $45.2 million, EPS rose by 200% YoY to $0.03, and gross margin improved to 59.08%, up 3.89% YoY.
Analysts' ratings are mixed. While some firms upgraded the stock due to valuation and a shift to subscription revenue, others lowered price targets, citing challenges in ad revenue, user base decline, and regulatory risks. The consensus sentiment leans neutral to slightly bearish.
