Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Meta shares still offers more value than Snapchat after its decline

With the SNAP share price having declined excessively this year, we take a quick look at how the company stacks up against peers Meta (Facebook), Twitter Inc. and Pinterest.

Meta Source: Bloomberg

SNAP share price

Last week saw a dramatic fall in the share price of Snapchat holding company, SNAP Inc.

While the US technology sector has been under pressure, the near-term SNAP price fall found its impetus from a revised trading update released by the business.

While the group had previously forecast revenue growth for the upcoming quarter of 20% to 25% annualised, and Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) up to $50million, the group now expects results to miss these forecasts on the back of a ‘deteriorating’ economy.

With the SNAP share price having declined excessively this year, we take a quick look at how the company stacks up against peers Meta (Facebook), Twitter Inc. and Pinterest.

Performance

Share performance Source: IG

In terms of a one month, three month and year-to-date total return, SNAP has been the worst performing share amongst its peers listed here. Twitter, while still negative year-to-date (-7.06%) is the outperformer.

We have, however, seen a sharp post-earnings gain in the Meta share price, making it the strongest performer in terms of total returns over the last month.

Fundamentals

Fundamentals Source: IG

While SNAP has been the worst performer year-to-date, it still carries the most expensive valuation in terms of a forward price to earnings multiple (45.74). The company also has the highest level of debt as a percentage of equity (relative to its peers) and the weakest operating margins.

Meta is the most conservatively priced on a price-to-earnings (P/E) valuation, with the best operating margins amongst the peers listed and very low levels of debt relative to equity.

Broker ratings and price targets

Broker ratings and price targets Source: Refinitiv and IG as of 30 May 2022

The recent share price decline does, however, see SNAP trading at the broadest discount to a consensus of 42 brokers' long-term price targets on the company.

Meta currently trades at the second largest discount to its long-term consensus of price targets from 58 brokers / analysts. SNAP and Meta both currently carry consensus 'buy' ratings while Twitter and Pinterest carry consensus ratings of 'hold'.

SNAP Inc. – technical analysis

Snapchat chart Source: ProRealTime

The share price of SNAP remains in a long-term downtrend. There is, however, a short-term suggestion that the share is oversold at current levels. Should a rebound from oversold territory manifest, it would be considered a short-term correction of a longer term downtrend.

Traders respecting the longer term downtrend might look for short entry in the event of a rebound from oversold territory. Only on a move back above dotted trendline resistance on our chart would we reassess the merits of a long bias to trades on the stock once again.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.