Snap Inc. (SNAP) AI Stock Analysis
SNAP AI stock analysis summary
AI ResearchSnap Inc. is a visual messaging and digital advertising technology company best known for its Snapchat application. Over the trailing twelve months, the company generated $6.35B in revenue with an operating margin of -2.6% and a net profit margin of -4.9%. Snap trades at a forward P/E of 7.7x and maintains a net cash position of $1.82B as of June 30, 2026.
- Market cap
- $10.37B
- Revenue (TTM)
- $6.35B
- P/E
- — fwd 7.7x
- 1Y return
- -21.0% S&P 500 16.8%
- Avg. target
- $7.44 21.3% vs last close
Bull case
- Quarterly revenue rose 18.9% year-over-year for the period ended June 30, 2026, alongside quarterly earnings growth of 395.8%.
- Free cash flow expanded from $34.8M in FY2023 to $437.2M in FY2025.
- The balance sheet carries $1.82B in net cash with a current ratio of 2.94 as of June 30, 2026.
Bear case
- Snap generated a trailing twelve-month profit margin of -4.9% and an EPS of -$0.18.
- Trailing twelve-month operating margin of -2.6% sits below the 13.3% median of its US-listed Communication Services peers.
- Snap shares have returned -92.1% over the past five years, trailing the S&P 500 return of 83.0%.
What Snap does
Snap Inc. operates as a technology company with a global presence across North America, Europe, and other regions. Its flagship product is Snapchat, a visual messaging application featuring camera, snap map, stories, and spotlight tabs that enable users to share short videos and images. The company also produces Spectacles, an eyewear product that captures photos and videos from a first-person perspective. Snap monetizes its user base through digital advertising products, including augmented reality ads and Snap ads in formats such as single image or video ads, story ads, collection ads, dynamic ads, and commercials.
Growth and profitability
Snap grew annual revenue from $4.12B in FY2021 to $5.93B in FY2025, delivering a 5-year revenue CAGR of 18.8%. Annual revenue growth slowed from 64.2% in FY2021 and 11.8% in FY2022 to 0.1% in FY2023, before accelerating to 16.4% in FY2024 and 10.6% in FY2025. Operating margins have remained negative over the five-year period, registering at -17.1% in FY2021, -30.4% in FY2023, and -9.0% in FY2025. Annual net income improved from -$1.43B in FY2022 to -$460.5M in FY2025. For the latest quarter ended June 30, 2026, quarterly revenue rose 18.9% year-over-year, while quarterly earnings grew 395.8%.
Balance sheet and cash flow
As of June 30, 2026, Snap held $2.66B in cash and short-term investments compared to total debt of $844.3M, leaving net cash of $1.82B. Total assets stood at $7.47B and shareholders' equity was $1.93B, with a current ratio of 2.94 and a debt-to-equity ratio of 0.44. In FY2025, operating cash flow was $656.2M and free cash flow reached $437.2M. Capital expenditures were $219.0M, and the company allocated $2.75B to share buybacks during the year.
Valuation and performance
With a market cap of $10.37B and enterprise value of $10.51B, Snap trades at a forward P/E of 7.7x, below the 14.1x median of its US-listed Communication Services peers. Its price-to-sales ratio is 1.6x, compared to the peer median of 0.8x, and its EV-to-revenue multiple is 1.7x. Over the past year, Snap shares fell 21.0% while the S&P 500 (SPY) returned 16.8%. Over a five-year horizon, the stock declined 92.1% against an 83.0% gain for the S&P 500.
What analysts expect
Wall Street coverage includes 8 Strong Buy, 2 Buy, 29 Hold, 2 Sell, and 1 Strong Sell ratings. The mean price target is $7.44, representing a 21.3% premium over the last close of $6.13. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $6.81B and EPS of -$0.07. For the next fiscal year, 37 analysts forecast revenue of $7.53B and EPS of $0.13. Snap exceeded EPS estimates in 3 of the last 4 quarters, and its next earnings date is November 4, 2026.
Key risks and what to watch
- Snap has reported an annual net loss in each of the past five fiscal years, including -$460.5M in FY2025.
- Research and development expense reached $1.77B in FY2025, representing a significant portion of its $5.93B in annual revenue.
- Short interest represents 9.1% of the public float, indicating sustained market skepticism.
- The company directed $2.75B toward share buybacks in FY2025 despite generating a net margin of -7.8%.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this SNAP AI stock analysis
This page is an AI-written research summary of Snap Inc. (SNAP). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: SNAP income statement, SNAP balance sheet, SNAP key metrics, SNAP analyst forecast, SNAP chart. See the SNAP stock overview for the latest quote and news.
SNAP AI stock analysis FAQ
Does Snap pay a dividend?
No, Snap does not pay a dividend. In FY2025, the company deployed capital toward $219.0M in capital expenditures and $2.75B in share buybacks.
What is Snap's cash and debt position?
As of June 30, 2026, Snap had $2.66B in cash and short-term investments and $844.3M in total debt, resulting in net cash of $1.82B.
What are analysts forecasting for Snap's revenue and earnings?
Analysts estimate FY2026 revenue of $6.81B and an EPS of -$0.07. For FY2027, 37 analysts project revenue of $7.53B and an EPS of $0.13.
How do Snap's valuation multiples compare to peers?
Snap trades at a forward P/E of 7.7x, below the 14.1x median of its US-listed Communication Services peers, but has a price-to-sales multiple of 1.6x versus the peer median of 0.8x.