Snap Inc. (SNAP)
Valuation Overview•Is Snap Inc. Overvalued or Undervalued?
Market price has outpaced base-case intrinsic cash flows, pricing in significant future growth optimism.
Fragile underlying quality score of 43/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
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Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This outlook is strongly supported by highly attractive capital returns, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
SNAP struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company demonstrates solid revenue growth (8.8% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (-5.1%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.6B | +10.6% | +8.8% | +18.8% | +58.7% | |
| EBITDA | -$124.5M | — | +32.2% | — | — | |
| Net Income | -$164.0M | +34.0% | +31.5% | — | -2.1% | |
| EPS (Diluted) | $-0.10 | +35.7% | — | — | +3.1% | |
| Free Cash Flow | $120.5M | +99.9% | +99.2% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 57.3% | 54.3% | 56.2% | 41.5% |
| Operating Margin | -5.1% | -18.0% | -20.3% | -85.9% |
| Net Margin | -4.9% | -16.5% | -18.5% | -84.2% |
| FCF Margin | 11.1% | 4.1% | 3.8% | -34.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q3'26Latest | $-0.12 | $-0.10 | +17.9% | ||
| Q2'26 | $-0.07 | $-0.05 | +25.2% | ||
| Q1'26 | $-0.03 | $0.03 | +197.0% | ||
| Q4'25 | $-0.12 | $-0.06 | +50.8% | ||
| Q3'25 | $-0.16 | $-0.13 | +18.8% | ||
| Q2'25 | $-0.13 | $-0.08 | +39.9% | ||
| Q1'25 | $-0.04 | $0.01 | +125.7% | ||
| Q4'24 | $-0.14 | $0.08 | +159.2% |
Total return is -34.1% (1Y), lagging the benchmark by -50.1%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -30.9% | -44.1% | — |
| 1Y | -34.1% | -50.1% | — |
| 3YCAGR | -13.5% | -34.5% | — |
| 5YCAGR | -41.0% | -52.5% | — |
| 10YCAGR | -13.7% | -27.1% | — |
The S&P 500 is at 31.6x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Snap Inc. (SNAP) valuation, health, and returns.
Snap Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Limited: Fair versus peers compared to industry peers. overvalued (implying -59.7% downside from DCF intrinsic value of $2.23)
Snap Inc. has multiple valuation anchors: DCF Intrinsic Value: $2.23 | Peer Relative Fair Value: $5.16 | Wall Street Analyst Target: $7.78 (implying +38.4% upside). A convergence of these signals offers higher conviction.
Snap Inc. displays fair financial health with a composite quality score of 43/100, supported by a Altman Z-Score of -1.0 (distress zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of -6.9%.
Snap Inc. returns capital via buybacks instead of dividends, carrying a 29.0% buyback yield and reducing outstanding shares by +3.7% in the last 12 months.
Snap Inc.'s current growth trajectory is Stable. The company achieved +10.6% 1Y revenue growth and +35.7% 1Y EPS growth, compared to its 3Y revenue CAGR of +8.8%.
Wall Street consensus is Hold based on 73 analysts, beating EPS expectations in 100% of recent quarters with a 14-quarter streak. The consensus price target represents a +38.4% change from current levels.
Investment risks for Snap Inc. include: -56.8% 1-year max drawdown, high beta (2.13x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 2.13x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.