Snap Inc. shares jumped, reversing an earlier decline, after the social-media company said it expects to post revenue growth of 50 per cent or more for several years, buoyed by investments in more engaging advertising and innovations in augmented reality.
The company, parent of the Snapchat app, is “in a position to drive multiple years of 50 per cent-plus revenue growth,” said Peter Sellis, senior product director, in a presentation Tuesday at Snap’s first-ever investor day. At the event, executives outlined a vision for how Santa Monica, California-based Snap will boost its audience while maintaining user privacy and trust.
The rosy forecast could help assuage concerns that Snapchat, trading near a stock record, might be peaking in growth. The company still has room to expand after its increased popularity during the pandemic, when advertisers have started to understand the value of Snap’s augmented reality tools, which let people try on products virtually. Many marketers also see Snapchat as an alternative venue for ads amid the political turmoil and misinformation on other social media sites.
Snap shares rose to US$64.97 at 1:50 p.m. in New York. They had climbed as much as 6.7 per cent following the comments, after falling more than 10 per cent earlier in the day. The stock is up more than 30 per cent so far this year.
Analysts, on average, project sales will rise 48 per cent to US$3.72 billion this year, according to data compiled by Bloomberg. Snap’s growth is estimated to be 37 per cent for 2022 and 33 per cent for 2023.
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