Well it appears that any sliver of gains in Snapchat (NYSE:SNAP) have ironically disappeared just as fast as their messages in the app. According to yesterday's earnings numbers, the company that made dog ears and flower crown filters an actual thing (and every teenage girl's thirst trap), has taken yet another -25% plunge.

(Source: CNBC) 

Starting off with the cold, hard ugly facts, Snap reported earnings per share of $0.02, which was right on the money with expectations. However, their revenue was the debbie downer of the day as Q2 revenue settled at $1.24 billion, just shy of the $1.25 billion analysts were predicting. To add insult to injury, Snap’s guidance was also a mega fail for Q3 revenue as the projections sat in the $1.335 billion to $1.375 billion range, whereas analysts wanted to see $1.36 billion. So yeah, not great news for investors. 

(Source: Giphy) 

However, with that said, when it comes to pretty much everyone, these numbers are about as shocking as finding out water is wet -  especially since this isn’t the first time Snap has disappointed investors with their numbers. As the company has struggled to gain ground following their -90.82% crash since 2021, the stock has been bouncing between $7.29 and $17.93 like a pinball machine. Meaning, this two year range mixed with disappointment after disappointment has investors feeling like they’re stuck in the movie Groundhog Day.

(Source: Reuters) 

So what’s the deal here? Well apparently, the main issue Snapchat is facing is none other than competition (aka eyeball attention). The mass majority of Snaps target audience members these days wants to either doom scroll on Meta (Facebook/Instagram) or TikTok. It’s just that simple. And with Meta’s killer quarter, with shares soaring 7%, this puts the nail in the coffin that screams “You’re old news Snap”. 

(Source: Giphy) 

Another woe for Snap, is that their advertising environment is quite simply, shaky and confusing as CEO Evan Spiegel (the guy who turned down Zuckerberg’s billions) mentioned that brand-oriented advertising revenue dropped 1% year-over-year. 

(Source: Market Screener) 

And while the company is trying to revamp its ad platform to attract more advertisers, it's a slow grind, especially as Snapchat’s main audience doesn’t exactly scream “discretionary” income for advertisers. 

(Source: Giphy) 

Although, with that said, Snap’s monthly active users grew to over 850 million, up from 800 million in February. So I guess it’s still cool… to some. But still, even with 11 million Snapchat+ subscribers, (a subscription service they launched to diversify revenue), Snaps forecast for Q3 tells investors everything they need to know regarding future outlook and confidence. According to Snap, they're expecting adjusted earnings of $70 million to $100 million, which is below the $110 million analysts were hoping for.

(Source: Bloomberg) 

So with that said, what’s the moral of the story here? Well it’s simple: Snap is struggling harder than a millennial trying to buy a house. 

They’re caught in a tough spot with fierce competition, a shaky ad market, and investors who are losing patience. Now obviously, some may look at this as a positive considering Snapchat shares are screaming cheap. But for savvy investors looking at the stock chart, as it resembles a standard deviation curve from my college statistics class, there’s likely no sign of a dip buy to be had. 

Of course, do what you will with this information, but it’s clear that while Snap might've made disappearing messages cool, it looks like the ones that are really pulling the vanishing act are Snap's profits. And that, my friend, is no bueno… noooo bueno. 

At the time of this writing, Snap Inc. is down -24.23% on the day, and -39.71% YTD. 

Stocks.News holds positions in Snap Inc. and Meta Platforms as mentioned in the article.