Snap Inc (SNAP Stock Report) has had an exceptional 2019 and has seen its stock gain 190% year-to-date. Snap continues to perfume well and has outpaced the growth of peers such as Twitter and Facebook.
Evan Spiegel, the CEO of the company, has been selling millions of Snap’s stock, and last week he sold stock worth more than $33 million. It seems this is the trend currently as both Amazon CEO, Jeff Bezos, and Facebook CEO, Mark Zuckerberg, have also been selling shares of their companies.
After a torrid 2018, fundamentals of Snap are slowly improving and uses base has continued to grow steadily. Here are things to consider if the stock is worth buying.
Improving User Base Growth
Last year the company’s user base struggled, but things have changed this year. In the first quarter, the company added 4 million daily active users, and in the second quarter, the company grew users to 13 million.
Currently, the company boasts 500 million active users, and this is a result of the company’s updated version of its app and more focus on AR technology. Recently the company said it would partner with Spotify to allow users to share podcasts and music directly in the app.
Avoiding Regulatory Issues
This year the company has managed to avoid much of the criticism it endured last year with top executives leaving. It has also avoided regulatory issues that tech companies such as Facebook have faced in recent times. For instance, Facebook has faced criticism over its cryptocurrency project Libra and recently FTC fined Facebook $5 billion.
Introduction of Gaming
Although the company’s advertising business is doing well, they are nonetheless focusing on gaming business as a new source of revenue. In April, Snap launched Snap Games which caught the attention of Zynga which introduced a new battle royale game on the platform. Gaming could bring the company millions in sales revenue in 2020.
The company’s Q3 revenue guidance shows that the company expects revenue to range from $410 million to $435 million.