Traders are looking for two key numbers from most stocks this earnings season: revenue and EPS. However, for certain select stocks, there are even more important numbers ahead.
According to Barclays analyst Ross Sandler, Snap Inc SNAP 2.45% is one of those stocks that has more important numbers than earnings and revenue in the eyes of traders.
Sandler says the Snap story is all about users, particularly Snap’s daily active users (DAU).
He predicts Snap’s Q1 earnings will be a binary event for the stock depending on the company’s Q1 DAU number. If Snap reports anything above the 9-10 million range, the stock could see major upside. Any number below 9 million would likely drive significant downside.
Sandler says market expectations seem relatively low for Snap, as traders have grown increasingly concerned about competition from Facebook Inc FB 1.73% and Alphabet Inc GOOGL 3.71%. An updated DAU number will be a strong indication of whether Snap is gaining or losing momentum.
“The rest of the 1Q key metrics are far less important given the early stage of [the] SNAP ads business, and market cap hinges on investors’ belief (or not) that SNAP can become the next big platform behind Facebook and Google,” Sandler explains.
Sandler is…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
