Snap Judgment: Is It Time to Add This Disappearing Act to Your Portfolio?

30‑Second Take

Why now? If you’re looking for a growth stock to buy now and hold for the long term, SNAP could well fit the bill.

The messaging app has increased its year-on-year (YoY) revenue by 14% (up to $1.36 billion), is making good strides in growing its subscription business, is growing its physical product range, has launched multiple new features to increase user loyalty and monetization.

It has also increased its daily active users by 38-million YoY, with monthly active users standing at an impressive 900-million. 

The visual messaging platform’s laser focus on growth and the progress made over the last 12 months isn’t reflected in the SNAP stock price, which has dropped 11.70% in the last month on Trump trade tariff fears. 

That dip is great news for investors looking to pick up a bargain with a view to holding for the long haul.

Trade Setup

Time frame: Swing to medium-term
Edge type: Momentum breakout

Snapshot Table

Chart

5-Day Synopsis: The last five days have been something of a roller coaster for SNAP stock prices. After reaching a high of $8.95 on Wednesday, the rest of the week was downhill with a cumulative 3.99% loss on the period.

Bull Case 

Core thesis: Snapchat is a visual messaging app to rival the likes of Meta’s WhatsApp and Facebook Messenger.

A pioneer in the ephemeral messaging space, Snapchat introduced the idea that not all content needs to be permanent.

By making Snaps (messages between contacts) disappear after viewing by the recipient, it encourages spontaneous, unfiltered communication. 

Catalysts: SNAP’s Q1 2025 report shows a company prepping for growth with several lucrative revenue streams increasing in maturity and an active advertiser base growing by 60%.

It has scaled its profitability to $108 million in adjusted EBITDA with $114 million in free cash flow.

It’s also grown its revenue from direct response advertising to record levels and outlined a strong longer-term growth strategy focused on the app’s core visual communication products, finetuning its content personalization capabilities thanks to investment in AI and ML, and the further development of its content creator ecosystem.

In short, this is a messaging app on the move. It ticks the boxes for a strong growth proposition, free cash flow, and multiple revenue streams.

Valuation upside: Analyst price targets run from a low of $6.50 to a high of $15.00. The average target is $9.62. 

Technical tailwind: SNAP stock is now trading at some of the cheapest prices seen to date, but it could mount a comeback thanks to its consistent revenue growth and ever-expanding revenue streams.

For those with a higher risk tolerance, this is the dream scenario for investment.

Bear Case 

Key risk: Despite its strong user growth statistics, SNAP is still in its infancy when it comes to optimizing monetization strategies. 

Its average revenue per user (ARPU) is lower than its rivals, leaving it highly reliant on volatile direct-response advertising. 

Macro/sector headwinds: Stricter privacy rules make it much more difficult for social media apps to harvest user data, as they now have to ask for consent to track what their audiences are doing.

This is tricky for platforms like SNAP, which rely on advertising (where user behavior is paramount for targeting) for revenue.

Compounding this challenge, President Trump’s “de minimis” tariff, which made it more expensive for Chinese brands to export goods below $800 to the USA, has impacted ad revenue.

Competitive threat: Platforms like Meta and TikTok are competing for attention and time from the same audience.

Meta has much deeper pockets and more advanced AI algorithms, which allow for better ad targeting. If those platforms can deliver superior results to advertisers, SNAP faces an uphill battle to grow its revenue from this stream.  

Crowded-trade concern: SNAP’s monetization gap, combined with macroeconomic pressures and tech platform changes, leaves it vulnerable to sharp downturns and investor pessimism.

Quick Checklist 

✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (June 15, 2025)

Deep‑Dive Links

• Q1 2025 Earnings Report 

• Analyst Ratings and Price Targets

• Short Interest Data

• Company Profile and Investor Relations

That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!

Best Regards,
—Noah Zelvis
Everyday Alpha