QUICK BUY ALERT: SNAPCHAT (SNAP)

The market was off to a rough start this week, with several companies taking large hits on Monday and Tuesday. One such company that tanked is Snapchat (SNAP), which dropped 43% by the end of Tuesday due to lowered guidance. The company warned that although they’re still growing year over year, their growth is slower due to inflation and interest rate concerns. Furthermore, Snapchat gets a significant portion of its revenue through advertising, with a large chunk of its clients being fashion and beauty related—as one may expect, this becomes a massive issue for both the advertiser and the company. If the advertiser cannot acquire goods at the same rate they had been before, they’ll be forced to pay more to compensate. In turn, they’ll be forced to cut spending elsewhere to preserve capital, and in many cases, that means cutting back on the cost of advertising. Here is where Snapchat’s struggles come into play—if brands are cutting back on advertising and putting money elsewhere, Snapchat takes a significant hit in terms of its revenue.

Many analysts have seen this as an opportunity to purchase stock in the company, and we wholeheartedly agree. If there was ever a time to buy Snapchat, that time is now. As we said, the company is still growing despite macroeconomic worries, and to get it at this price is a steal. As we continue out of the pandemic and our economy gets back on its feet, so will advertising, and so will Snapchat. The company still has a lot going for it, and we’re already seeing some resilience today as it tries its best to push back over that $15 mark. We’ve purchased Snapchat (SNAP) for our website portfolio at $14.10.

Thank you for reading; we hope this information has helped—happy investing.