- Snapchat: Don't Rush to Buy This Social Media Stock
May 17, 2026
It's been a tough ride for long-term Snap(NYSE: SNAP) investors. Once touted as a close rival to Meta Platforms' Instagram, the relatively small social media company remains unprofitable and is down by more than 30% year to date. Investors who are betting on a turnaround may want to cut their losses and review other investment opportunities.
Growth is slow and profits are nonexistent
Snap's revenue trajectory does not reflect what investors have come to expect from unprofitable, high-stakes companies. The social media company only has an annualized 8.8% revenue growth rate over the past three years. That's much lower than Meta Platforms' 19.9% compound annual growth rate (CAGR) over the same stretch.
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It's impossible to even compare the two tech companies anymore. A few years ago, investors would look at Snap's earnings to gauge how Meta Platforms would perform, and vice versa. Few investors do that anymore. Meta Platforms earned more than $200 billion in revenue over the past year, while Snapchat generated less than $10 billion over the same stretch.Image source: Getty Images.
The better comparison is Pinterest, but even then, it grows faster and actually makes a profit. Snap reported an $89 million net loss in the first quarter. It's still unprofitable almost 15 years after its launch, but it's not posting the type of revenue growth that warrants waiting for a flip to profitability.
Snap has limited ways to fuel meaningful improvements
Snap wrapped up Q1 with 956 million monthly active users, up 5% year over year. The company touted it as a win and a return to positive monthly active user growth. However, Snap must increase its average revenue per user to maintain its status as a growth stock, but it hasn't made sizable progress on that front.
Sponsored Snaps were a bright spot, as that segment generated a 226% year-over-year increase in per-impression clickthrough rates, but 12% overall revenue growth is nothing to write home about for a company that lacks profitability.
Snap's outlook suggests Q2 revenue of $1.535 billion, a 14.6% year-over-year increase. That's good, but it also suggests flat sequential growth. Revenue isn't budging by much quarter over quarter.
Meaningful growth rates remain an issue, and Snap is competing with social media giants that are gaining market share faster. Instagram and TikTok are both more popular than Snapchat. Users are gravitating toward those apps, and advertisers are following consumers.
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Strong competition and a history of low growth rates don't bode well for Snap shareholders. Perhaps investors would be more patient with Snap if it were producing 20% to 30% year-over-year revenue growth at this stage, as Meta Platforms is doing right now.
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Snapchat: Don't Rush to Buy This Social Media Stock was originally published by The Motley Fool
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- Snapchat: Don't Rush to Buy This Social Media Stock
May 17, 2026 · fool.com
Snap only grew its user base by 5% year over year and posted 12% year-over-year revenue growth. Those numbers aren't good when profitability remains an issue and larger social networks continue to gain ground.
- Snap Lawsuit Deal Highlights Ongoing Youth Safety And Investor Risk Concerns
May 17, 2026
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Snap reached a settlement in a lawsuit brought by a Kentucky school district alleging its platform contributed to social media addiction and harmed students. The case, filed alongside claims against YouTube and TikTok, focused on classroom disruption and youth mental health concerns. Settlement terms were not disclosed, and the agreement comes as more than 1,200 similar cases are pending nationwide.
For shareholders watching NYSE:SNAP, this legal update comes during a period of weak recent trading. The stock last closed at $5.53 and is down 32.0% year to date and 36.8% over the past year, with a 3 year decline of 43.1% and a 5 year decline of 90.2%. These moves suggest that legal and regulatory headlines like this can be important to consider in a risk assessment.
The settlement could influence how future suits against Snap and other platforms are handled, even though specific financial or operational impacts have not been disclosed. With Meta still heading toward trial, investors may want to monitor how courts and regulators frame responsibilities for user well being and school disruption across social media companies.
Stay updated on the most important news stories for Snap by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Snap.NYSE:SNAP 1-Year Stock Price Chart
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This settlement removes one near term legal overhang for Snap, but it also highlights the broader regulatory and litigation backdrop that investors are already watching. The case is the first of more than 1,200 similar lawsuits, so even though the terms are confidential, it points to potential ongoing legal expenses and the possibility of further settlements or product changes. At the same time, Snap has recently filed a US$520.3m shelf registration tied to employee stock plans and there have been insider sale disclosures. Together, these show that equity remains an important part of compensation and liquidity for insiders. When combined with pressure from competition such as Meta’s Instants feature and reports of softer ad sales, this kind of legal development can feed into questions around future compliance costs, product design for younger users, and how much management attention is absorbed by court cases versus product and monetization work. For you as a shareholder or potential investor, this update mainly adds another data point to the existing risk picture around regulation, youth safety, and litigation exposure for large consumer internet platforms such as Snap, Meta, Alphabet, and ByteDance.
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How This Fits Into The Snap Narrative
The narrative already flags regulatory and legal pressures as a risk, and this settlement supports that point by showing that youth safety and mental health concerns can translate into concrete cases and potential cash outflows. If litigation and compliance costs stay elevated or increase, that could challenge the narrative’s focus on higher margins from AR, subscriptions, and ad tools, because legal spending and product redesigns can weigh on profitability. The narrative centers heavily on AR glasses, AI-powered ad products, and subscriptions, while this school-district litigation and the broader set of youth safety lawsuits are not deeply reflected, so investors may want to layer these legal factors into their own view.
Knowing what a company is worth starts with understanding its story. Check out one of the top narratives in the Simply Wall St Community for Snap to help decide what it is worth to you.
The Risks and Rewards Investors Should Consider
⚠️ The settlement is part of a wider wave of more than 1,200 lawsuits focused on youth mental health and social media addiction, so Snap could face continued legal costs and possible product constraints across multiple jurisdictions. ⚠️ Competition from Meta, Alphabet’s YouTube, and ByteDance’s TikTok, together with reports of lost ad sales and new copycat features, may limit Snap’s ability to offset higher legal and compliance spending with stronger monetization. 🎁 Resolving this bellwether case before trial reduces near term uncertainty for this specific suit and avoids the distraction and potential reputational hit that can come with a protracted public trial process. 🎁 A settlement that is described as amicable may give Snap slightly more room to focus management time on AR, AI-powered ad tools, and subscriptions that the narrative highlights, while adjusting policies and product design to address regulator and school district concerns.
What To Watch Going Forward
From here, keep an eye on whether other school-district and youth safety lawsuits against Snap are settled on similar terms, proceed to trial, or result in new product obligations or monitoring requirements. Any disclosure about cumulative legal expenses, settlement amounts, or commitments to change product design for teens will be useful signals for how this risk line is affecting margins and product roadmaps. It is also worth tracking how regulators frame responsibilities for social media addiction and classroom disruption across Snap, Meta, YouTube, and TikTok, since common standards could shape ad targeting, engagement features, and time spent on the app. Insider sales and new stock registrations can also be monitored alongside these developments to understand dilution and how insiders are reacting to the legal and competitive backdrop.
To ensure you're always in the loop on how the latest news impacts the investment narrative for Snap, head to the community page for Snap to never miss an update on the top community narratives.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SNAP.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- 5 Revealing Analyst Questions From Snap’s Q1 Earnings Call
May 16, 2026
Snap’s first quarter results met Wall Street’s revenue expectations and showed notable progress in narrowing operating losses. Management attributed the quarter’s performance to continued growth in Snapchat’s global user base and a strong acceleration in subscription revenue, particularly from the Snapchat+ and Memories Storage offerings. CEO Evan Spiegel pointed to improved engagement, with Spotlight and augmented reality features driving increased daily activity. CFO Derek Andersen emphasized that operational efficiencies and targeted investments in AI-powered tools led to better gross margins and improved adjusted EBITDA.
Is now the time to buy SNAP? Find out in our full research report (it’s free).
Snap (SNAP) Q1 CY2026 Highlights:
Revenue: $1.53 billion vs analyst estimates of $1.53 billion (12.1% year-on-year growth, in line) EPS (GAAP): -$0.05 vs analyst estimates of -$0.07 ($0.02 beat) Adjusted EBITDA: $233.3 million vs analyst estimates of $213.1 million (15.3% margin, 9.5% beat) Operating Margin: -4.9%, up from -14.2% in the same quarter last year Market Capitalization: $9.20 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Snap’s Q1 Earnings Call
Ross Sandler (Barclays) asked about drivers behind the Q2 revenue acceleration guidance. CFO Derek Andersen explained the acceleration is primarily attributed to improving conditions in the North America ad business and stronger upfront commitments. Michael Nathanson (MoffettNathanson) questioned the potential for Snap to open its ad inventory to third-party demand-side platforms (DSPs). CEO Evan Spiegel said the company values direct advertiser relationships but may selectively consider partnerships for upper-funnel video demand. Richard Greenfield (LightShed Partners) pressed on North America ad revenue declines and balancing focus between subscriptions and ads. Spiegel noted improving monetizable user trends and strength in SMB advertisers, while acknowledging ongoing challenges with large customers. Nitin Bansal (Bank of America) inquired about the sustainability of Snapchat+ growth and future monetization opportunities. Spiegel pointed to product innovation, new feature rollouts like Creator Subscriptions, and higher-value tiers such as Lens+ as drivers of durable subscription growth. Eric Sheridan (Goldman Sachs) asked about execution priorities for Specs’ launch and the role of AI agents. Spiegel highlighted ongoing development efforts, the importance of ecosystem partnerships, and the potential for AI-driven interfaces to change user-device interaction.
Story Continues
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the adoption and monetization of Specs following its commercial launch, (2) progress in improving the large advertiser segment within North America, and (3) continued expansion and retention in Snap’s subscription offerings. We will also track the company’s success in managing regulatory risks and cost restructuring.
Snap currently trades at $5.53, down from $6.11 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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- Assessing Whether Snap (SNAP) Looks Undervalued After Recent Share Price Volatility
May 16, 2026
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Recent performance snapshot
Snap (SNAP) has seen mixed recent performance, with the stock up about 3.2% in the last session but down roughly 9% over the past week and about 8% over the past month.
Over the past 3 months, the stock is up around 14.5%, while the year to date performance shows a decline of roughly 32%. On a 1 year view, total return is down about 36%.
See our latest analysis for Snap.
Snap's 1 day share price return of 3.17% comes after a period where momentum has faded, with the 1 year total shareholder return down 36.8% and the 5 year total shareholder return down 90.23%, despite a stronger 90 day share price return of 14.49% from a lower base.
If you are comparing Snap with other growth stories in digital media and technology, it can help to widen the net using a focused list of 62 profitable AI stocks that aren't just burning cash
With Snap trading at a discount to some analyst targets and an intrinsic value estimate, yet still reporting losses despite revenue growth, investors should consider whether the stock is undervalued or whether the market already reflects expectations for future growth.
Most Popular Narrative: 42.3% Undervalued
According to the most followed narrative, Snap's fair value of $9.58 sits well above the last close at $5.53, which frames the stock as significantly discounted on this view.
Snap presents a compelling growth investment with significant potential over the next 1-3 years, driven by its innovative capabilities and strong user base. However, its success depends on its ability to navigate competitive pressures, macroeconomic headwinds, and regulatory challenges. Investors should approach with a balanced view, recognizing both the upside potential and inherent risks.
Read the complete narrative.
Want to see what is built into that fair value of $9.58? The narrative leans heavily on faster earnings progress, firm revenue momentum, and higher future profit margins.
Result: Fair Value of $9.58 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this story can change quickly if competitive pressure weighs on user engagement or if ad spending weakens, which could challenge the $9.58 fair value case.
Find out about the key risks to this Snap narrative.
Next Steps
With sentiment split between undervaluation potential and real business risks, now is a good time to review the data yourself and pressure test the thesis from both angles using 3 key rewards and 1 important warning sign
Story Continues
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SNAP.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- YouTube, Snap settle school district's social media addiction claims
May 16, 2026
By Diana Novak Jones and Nate Raymond
May 15 (Reuters) - Alphabet's YouTube and Snap have reached settlements in the first case set for trial in litigation seeking to force social media platforms to cover the costs school districts incur to combat a youth mental health crisis they say the companies fueled.
The settlements were detailed in court filings on Friday in federal court in Oakland, California, and resolve claims by a Kentucky school district that is still due to take Facebook and Instagram parent Meta Platforms and TikTok to trial on June 15.
Terms of the settlements with Breathitt County School District in rural Eastern Kentucky were not disclosed.
"This matter has been amicably resolved and our focus remains on building age-appropriate products and parental controls that deliver on that promise," a YouTube spokesperson said in a statement.
Snap, the parent company of Snapchat, did not respond to a request for comment.
More than 3,300 lawsuits involving addiction claims are pending in California state court against the social media companies. Another 2,400 cases brought by individuals, municipalities, states and school districts have been centralized in California federal court.
In a landmark trial, a Los Angeles jury on March 25 found Meta and Alphabet's Google negligent for designing social media platforms that are harmful to young people. It awarded a combined $6 million to a 20-year-old woman who said she became addicted to social media as a child.
The companies have denied the allegations and say they take extensive steps to keep teens and young users safe on their platforms.
Breathitt is one of more than a thousand school districts suing the social media companies over claims they caused a mental health crisis among students and then saddled schools with the fallout.
The school district has been seeking over $60 million to cover the costs of counteracting social media's impact on students’ mental health and to fund a 15-year mental health program to abate the problem.
It also seeks a court order requiring the companies to modify their platforms to reduce addictive features.
Its case is a bellwether, or test case, for over a thousand similar school districts' lawsuits.
Judges and attorneys often use bellwether verdicts to assess the potential value of remaining claims and guide settlement talks. Typically, several bellwether cases are tried before reaching a broader resolution.
(Reporting by Diana Novak Jones in Chicago and Nate Raymond in Boston; Editing by Tom Hogue)
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- YouTube, Snap settle school district's social media addiction claims
May 15, 2026 · reuters.com
Alphabet's YouTube and Snap have reached settlements in the first case set for trial in litigation seeking to force social media platforms to cover the costs school districts incur to combat a youth mental health crisis they say the companies fueled.
- Vertiqal Studios Announces Q1 2026 Results
May 15, 2026
Toronto, Ontario--(Newsfile Corp. - May 15, 2026) - Vertiqal Studios Corp. (TSX: VRTS) (FSE: 9PY0) ("Vertiqal" or the "Company") Vertiqal Studios, a leading digital-channel network and video-production studio, as well as the owner of North America's largest gaming and lifestyle network on social media, today announced its financial results for the three months ended March 31, 2026.
Key Financial Highlights for First Quarter 2026:
Vertiqal generated revenue of $726,091 for the three months ended March 31, 2026, an increase of $20,246, or 2.9%, compared to $705,845 in the prior year period. Gross profit for Q1 2026 was $532,751, representing a gross margin of 73.4%, compared to gross profit of $567,186 and a gross margin of 80.4% in Q1 2025. The compression in gross margin reflects the shift in revenue mix toward direct media advertising, which carries higher associated content production and delivery costs relative to the Snapchat programmatic revenue it partially displaced. The overall growth reflects two offsetting segment-level dynamics; (i) direct media advertising revenue increased meaningfully compared to Q1 2025, driven by stronger brand partnership activity; and (ii) the contribution of new insertion order demand across the Company's owned and operated social media channels. The revenue growth reflects both the expansion of the Company's channel footprint following the Enthusiast Gaming asset acquisition in September 2025 and improved monetization of its digital advertising inventory. The revenue growth was partially offset by a decline in Snapchat programmatic revenue compared to Q1 2025. The decrease reflects continued softness in the Snapchat advertising market, including lower CPM rates and reduced demand from brand advertisers on the platform, consistent with broader industry trends in short-form OTT monetization. Snapchat programmatic revenue, which is recognized on a net revenue-share basis with minimal incremental cost of sales, represented a proportionally larger share of the prior year revenue base; as direct media arrangements — which require the Company to fulfil insertion orders and deliver content directly to brand advertisers — became a more significant contributor in Q1 2026, cost of sales increased accordingly.
2026 Outlook:
The Company received CAD $2.7 million (USD $1.948 million) in private placement proceeds during through the issuance of secured debentures (see press release dated April 13, 2026) providing working capital to support operations and growth initiatives. "Q1 2026 demonstrated meaningful progress across the business, with direct media revenue more than doubling from the prior year as we continue to deepen relationships with brand advertisers and expand the monetization of our owned and operated channel network," said Max Desmarais, Chief Executive Officer of Vertiqal. "Our gross margins remain healthy, and the foundation we built through our 2025 acquisitions is now fully operational. We are focused on driving operating leverage from that base. As we move through 2026, our priorities are clear: grow direct media revenue, scale the multi-channel network business, and close the gap to positive normalized EBITDA. We are energized by the opportunity in front of us and look forward to sharing our continued progress."
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Financial Results
Below is a summary of the financial results for the three months ended March 31, 2026, and March 31, 2025.
Three months
ended March 31, 2026 Three months
ended March 31, 2025 Variance % Revenues 726,091 705,845 3% Gross Profit 532,751 567,186 -6% Total Expenses 1,674,796 1,880,599 -11% Net Loss (1,142,045) (1,313,416) -13%
About Vertiqal Studios
Vertiqal Studios is a scaled digital-channel network and video-production studio that owns North America's largest gaming and lifestyle network. The Company helps global brands reach Gen Z and Millennial audiences through data-driven creative, always-on digital campaigns, and performance-oriented distribution. Vertiqal manages 200+ channels across TikTok, Instagram, YouTube, and Snapchat, producing over 100 pieces of content per day for a community of more than 52 million followers. Revenue is generated through a mix of direct brand partnerships, agency relationships, and platform monetization across its owned and operated channels.
For more information, please visit www.vertiqalstudios.com.
For media inquiries, please contact:
Press Inquiries Email: info@vertiqalstudios.com
Investor Relations Email: ir@vertiqalstudios.com
Forward-Looking Information
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of the Company. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Accordingly, readers should not place undue reliance on the forward‐looking statements and information contained in this news release.
The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
Non-IFRS measures and reconciliation
This press release includes non-IFRS measures such as normalized EBITDA. These measures do not have standardized meanings under IFRS and may not be comparable to similar measures used by other issuers, limiting their usefulness as comparative measures. A reconciliation to the most directly comparable IFRS measure will be provided in our MD&A, available on SEDAR+.
This news release makes references to certain non-IFRS measures. These measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. The Company believes that disclosing these non-IFRS measures provides readers of this news release with important information regarding the Company's financial performance. By considering these measures in combination with IFRS measures, the Company believes that readers are provided with additional and more useful information about the Company than readers would have if they simply considered IFRS measures alone. We use non-IFRS financial measures including "normalized EBITDA".
These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and industry metrics in the evaluation of issuers. The Company's management also uses non-IFRS measures and industry metrics to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. The non-IFRS measures reported by the Company do not have a standardized meaning prescribed by IFRS and the Company's method of calculating these measures may differ from those of other issuers or companies and may not be comparable to similar measures used by other issuers or companies. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS.
Certain information, including definitions, about non-IFRS financial measures, non-IFRS ratios, and supplementary financial measures can be found in the Company's Q1 2026 MD&A which is available on the Company's SEDAR+ profile at www.sedarplus.ca.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/297692
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- 1 Cash-Producing Stock to Target This Week and 1 We Question
May 15, 2026
A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here is one cash-producing company that leverages its financial strength to beat its competitors and two best left off your watchlist.
Stock to Sell:
Perella Weinberg (PWP)
Trailing 12-Month Free Cash Flow Margin: 14%
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ:PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Why Do We Pass on PWP?
Annual revenue growth of 2.9% over the last five years was below our standards for the financials sector Earnings per share have dipped by 25.6% annually over the past four years, which is concerning because stock prices follow EPS over the long term Negative return on equity shows management lost money while trying to expand the business
At $17.73 per share, Perella Weinberg trades at 1.9x forward price-to-sales. Read our free research report to see why you should think twice about including PWP in your portfolio, it’s free.
One Stock to Buy:
Snap (SNAP)
Trailing 12-Month Free Cash Flow Margin: 10%
Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.
Why Are We Backing SNAP?
Highly efficient business model is illustrated by its impressive 11.9% EBITDA margin, and its rise over the last few years was fueled by some leverage on its fixed costs Incremental sales over the last three years have been highly profitable as its earnings per share increased by 35% annually, topping its revenue gains Free cash flow margin grew by 8.8 percentage points over the last few years, giving the company more chips to play with
Snap is trading at $5.70 per share, or 8.8x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.
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- Meta vs. Snap: What Do Their Quarterly Revenue Trends Tell Investors?
May 15, 2026 · fool.com
Meta maintains a larger scale in revenue generation than Snap, consistently reporting higher totals across all tracked quarters. Both companies exhibit cyclical quarter-over-quarter revenue patterns marked by late-year peaks and subsequent declines, though Meta displays a wider overall range of growth.
