Summary: We sat out the 1Q print since we didn't have much reason to be there. Mgmt already told the street that it wasn't providing guidance, so the only play on the print was on the quarter itself, and we don't have any edge on the quarters yet. We chose to use the 1Q print as a sniff test instead. We suspected that the seasonal decline in 1Q revenue that mgmt flagged in its S-1 could have been a headfake. If so, SNAP could have have been a +$30 stock at this point. However, the fact that it wasn't gives us more confidence that consensus is overshooting SNAP's near-term revenue growth prospects, which we previously viewed as the only real positive in the story.
We are planning on hosting a call within the next 2 weeks. We already covered most of the supporting analysis during our first SNAP call back in late February (replay link below). We will expand on the analysis below during our upcoming call, and discuss how we expect the story to play out.
REPLAY | SNAP | Bull vs. Bear
03/03/17 02:13 PM EST
[click here]
Call if you have questions.
