Snap: Large R&D Investments With Little To Show For It – Seeking Alpha

stockcam Snap’s (NYSE:SNAP) first quarter results were poor, which has kept the stock price low, even as many other tech stocks have done well. Some of Snap’s problems are likely the result of genuine macro weakness, with platform policy changes and company-specific issues also contributing. Snap’s management believes that the macro environment has stabilized, although remains weak. Inflation, declining excess savings and the resumption of student loan repayments will likely pressure consumer spending in the second half of 2023, which could cause the macro environment to materially weaken. As a result, there is further downside risk, despite Snap trading on a fairly low valuation already. Snap Snap continues to register strong user growth, and now reaches 383 million daily active users and over 750 million monthly active users. Snapchat’s user demographics are also differentiated, potentially making the platform attractive to advertisers. Snapchat reaches 90% of the 13-24 year-old population and 75% of the 13-34 year-old population in over 20 countries. Figure 1: Snapchat Daily Active Users (source: Snap) While Snap’s differentiated user base is attractive, there remain questions about how well the company can monetize these users. In addition to the user base, Snap has been making heavy investments in
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