It is possible that Snap Inc. (SNAP), which owns Snapchat, will become profitable within five years. The SNAP stock’s revenue growth will surpass 50% annually.
The rapid growth of subscribers and revenue per user (ARPU) allowed Snap to increase revenue at approximately 45% per annum in 2019 and 2020.
As Snapchat expands its advertising platform, revenues should grow 50% annually over the next five years. Snapchat already offers a variety of e-commerce and gaming opportunities. The Snap acquisition of Fit Analytics and Craze will enable the social media giant to sell goods via social media.
Snap is also growing because of new videos and games it has developed within its app. A large percentage of Snapchat’s audience is still young and teen, so the services are in demand. To monetize its games, Snap is testing Snap Tokens in-game. In the end, however, the game’s in-game currency can be used for other applications, such as donating to those who create short videos in the SNAP stock’s Spotlight app.
Even though Snap remains unprofitable, it took its cash flow to a positive level in the past quarter, primarily due to lower costs and a corresponding increase in ARPU. Over the next five years, Snap could become a GAAP profitable company if these positive trends continue.
Despite the high level of competition in social media, Snap has maintained a highly retained customer base and continues to expand its customer base.
Snap Inc. (SNAP) closed at $52.14 on Monday, down -4.68%. There were 23.67 million shares traded, a decrease from the average volume of 25.42 million over the past three months. Stock prices fluctuated between $50.40 and $53.20 during trading. In the last five trading sessions, SNAP’s shares lost -11.88% of their value, while their share price declined -17.59% over the past month. On an annual basis, the stock has grown 4.13%. There are no significant changes in the stock’s 50-day moving average above the 200-day moving average of $44.29. Furthermore, the stock is currently trading at an RSI of 37.44.