VIDEO REPLAY: CLICK HERE
SUMMARY
- USER GROWTH: SNAP will never be FB. We estimate that SNAP has already captured the lion’s share of the low-hanging fruit in both North America & Europe. Incremental penetration will be tougher to come by given both technological hurdles internationally and a remaining TAM that is decidedly older; much of which FB has already penetrated. SNAP still has some runway, but growth will come at a much slower/lumpier pace.
-
MONETIZATION: SNAP is not TWTR either. The trajectory of SNAP's DAUs doesn’t currently matter since its current engagement levels suggests it already has a considerable amount of untapped inventory, which we estimate is multiples of anything TWTR ever had to work with. But the longer-term revenue trajectory is more of a question since the monetization gap between SNAP and FB isn’t as nearly wide as the ARPU metrics suggest, which also means profitability isn’t a guarantee.
-
POSITION: We're waiting on consensus estimates to come in before doing anything. While we would like to play the near-term monetization story, we would need the DAU & Monetization growth stories to decouple before doing so. But even then/if, the sell-side could easily box us out with their estimates, especially with SNAP trading at these levels. If the near-term story gets too far ahead of itself, we may wind up shorting SNAP instead; especially considering the longer-term backdrop.
