At the time of its IPO, investors believed the valuation of SNAP was closer to $30 billion than what it is today. In fact, SNAP came in at an IPO price of $17 per share and began trading on the New York Stock Exchange (NYSE) at $24 per share, more than double its current valuation.
Additionally, the company’s latest quarter earnings showed promise, with revenue and profit numbers exceeding analyst expectations. Revenue came in at $389.8 million while earnings per share (EPS) were quoted at a loss of $0.14 per share, a full $0.05 per share better than expected. As a result of its strong quarter SNAP rose 17% after releasing its earnings report.
There is no reason to believe that SNAP cannot once again attain the valuation that investors had previously put on the company just a few short years ago.
SNAP to $20
A share price of $20 would still put the valuation of Snapchat under $30 billion, a number which is certainly attainable for a company whose value hit $33 billion on its first trading day. By continuing to engage their young target demographic and continuing to iterate on its product, Snapchat is likely to continue pushing its value forward in the coming year. This makes it a great time to be a SNAP shareholder.
