Key insights
- The author anticipates a positive earnings report from SNAP, mirroring the recent positive results from peers Reddit and Pinterest. However, the author expresses concern that the expectation of good news is too widespread, potentially leading to a negative surprise. The author is long 40,000 shares of SNAP.
Three months ago when RDDT, PINS and SNAP reported Q4 earnings all three of them cratered. Since, they have moved very similarly as they have recovered to their pre-earnings prices.
On Thursday, RDDT reported Q1 and it’s up over 20 % since the call. Yesterday, PINS reported Q1 and while the initial price reaction of 20 % up didn’t last, it closed up 7 % today.
Tomorrow, SNAP reports Q1 earnings after the bell and it feels kinda obvious their results will be good also?
Yes, I know it sounds naive and simple-minded. Just because peers had a good quarter there’s no guarantee SNAP would too.
SNAP is flat since Thursday when RDDT reported so it hasn’t exactly rallied in sympathy with the others despite their good reports.
I do know how I might sound like a fool- I realize the logic above doesn’t encapsulate everything at stake here. Just because Macy’s had a good quarter there’s no guarantee Kohl’s did too. I feel like the fear that ad revenue is challenged is not as real as prior to knowing Reddit and Pinterest earnings though.
I was long 40,000 shares before SNAP Q4 earnings when the stock price was $6. A few months later the stock price was $3.8. Now it’s back to $6 and I’m long 40,000 shares going into Q1 earnings… I really hope they beat and numbers are great. Hard to stomach if it crashes when PINS and RDDT surged.