Shares of Snap Inc. are on track to close at a new all-time high Monday, a day before the social-media company is due to report third-quarter earnings.
The company will be the first major name in the internet space to report on advertising trends during the September quarter when it delivers results Tuesday afternoon. Stifel analyst John Egbert said in a note to clients that the ad market seems to have improved since August despite a limited movie slate.
Snap has been making progress with direct-response advertising, which could position the company to be a “long-term winner,” according to Bernstein analyst Mark Shmulik. Still, he cautioned that the company’s advertising successes may already be priced into the stock heading into Tuesday’s report and argued that the key metric may be the company’s domestic user growth.
likely to print strong user growth numbers, Snapchat can’t rely on lower-value international growth to compensate,” he wrote, while upping his price target to $32 from $28 and maintaining an outperform rating.
Snap executives may also discuss new features like City Painter, which lets people create augmented-reality art over international landmarks, and Sounds, which lets users add music to their messages. The Sounds function makes Snap more competitive with TikTok, and the company may share thoughts on how TikTok’s surging popularity has impacted Snap engagement trends.
Shares of Snap have rallied 75% so far this year as the S&P 500
has gained 7%.