XVARY Composite Score
39
/ 100
Weak
Combines growth, value, risk, and momentum factors into a single institutional-grade score.
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What it is
Snap sells ads and subscriptions inside Snapchat, the camera app where your messages disappear and the losses mostly do not.
How it gets paid
Last year Snap made $5.9B in revenue.
Why it's growing
Revenue grew 10.6% last year. Looking forward, we have raised our outlook for 2026, for reasons explained in greater detail below.
What just happened
Snap just showed it can still surprise people, posting $0.18 EPS versus a -$0.07 estimate.
At a Glance
B balance sheet — gets the job done, barely
50/100 earnings predictability — expect surprises
XVARY composite: 39/100 — weak
-$0.20 fy2026 eps est
$8B fy2028 rev est
What They Do
Snap sells ads and subscriptions inside Snapchat, the camera app where your messages disappear and the losses mostly do not.
Snap wins because it owns a habit, not just an app. You open Snapchat to talk with friends through photos and short videos, and that daily behavior supports $5.9 billion in annual revenue in 2025. The lock-in is social, not contractual, which means leaving is easy in theory and annoying in practice.
How They Make Money
$5.9B
annual revenue · their business grew +10.6% last year
total revenue
$5.9B
+10.6%
The Products That Matter
In-app advertising sales
Snapchat Advertising
$5.9B revenue · 100% of sales
it generated the entire $5.9B business last year. that focus can work when ad demand is healthy, but it leaves you exposed when execution slips.
100% of revenue
Key Numbers
25.5%
projected sales growth
That is the revenue growth forecast through 2028. Plain English: Snap needs growth, because current profits are still missing.
$10
18-month target
That target sits 33% above the $7.53 share price. Plain English: there is upside, but the floor in the same range is $5.
0.5%
operating margin
Operating margin → profit after running the business → so what: Snap has almost no cushion if ad demand slows.
$3.5B
long-term debt
Long-term debt → money owed beyond a year → so what: debt equals 21% of capital, which limits flexibility in a weak ad market.
Financial Health
B
Strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- long-term debt $3.5B (21% of capital)
B — functional but not a standout on the balance sheet.
Total Return vs. Market
You invested $10000 in SNAP 3 years ago → it's now worth $7680.
The index would have given you $14770.
source: institutional data · total return
What Just Happened
beat estimates
Snap just showed it can still surprise people, posting $0.18 EPS versus a -$0.07 estimate.
If a vendor shows $4.2B revenue with a triple-digit vs. prior year %, assume period or line-item error until the 10-Q matches it. The coherent FY anchor here stays ~$5.9B and +10.6%.
$4.2B
revenue (Q · verify)
$0.18
eps (Q · as in headline)
$5.9B
FY revenue anchor
the number that mattered
The number that mattered was the earnings surprise: actual EPS of $0.18 versus a -$0.07 estimate, because Snap needs proof that losses are narrowing faster than expected.
-
Snap inc. posted fair results for the third quarter of 2025.
-
Revenues fell slightly short of our estimate, but nonetheless advanced roughly 10% vs. prior year.
-
The bottom line, meanwhile, was still in the red, but came in ahead of our expectations.
-
Looking forward, we have raised our outlook for 2026, for reasons explained in greater detail below.
-
Snap has announced a partnership with ai developer perplexity.the deal will see perplexity’s ai chatbot integrated into snapchat, beginning in early 2026, as an option in the app’s chat interface. one might assume that snap is paying for the right to integrate this technology into its platform, but in fact, the opposite is true. perplexity is set to pay snap $400 million over the course of a year, in a mixture of cash and stock, in order to give snap’s nearly one billion monthly users a taste of its product.
source: company earnings report, 2026
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What Could Go Wrong
The #1 risk is litigation tied to the $263M ad-tech glitch.
Med
The $263M glitch is now a trust problem
snap faces class action lawsuits tied to an ad-tech error worth $263M. the stock already dropped 17% on the issue, which means this is no longer a footnote.
that single event already erased far more market value than the accounting mistake itself.
Med
100% of revenue comes from one ad product
all $5.9B of annual revenue comes from advertising inside Snapchat. no subscriptions engine. no hardware buffer. no second profit pool.
if ad pricing weakens or ad targeting underperforms, 100% of sales feel it.
Med
Growth has not turned into durable profit
analysts expect $7B of revenue in 2026, but they still expect a -$0.20 EPS loss. that is a scale story still waiting for proof of operating leverage.
if revenue rises and earnings stay negative, the market starts treating this like a structurally low-margin ad platform.
between the glitch litigation, 100% exposure to ad demand, and an expected -$0.20 EPS in 2026, SNAP still looks like a turnaround case that has not earned the benefit of the doubt.
Source: institutional data · regulatory filings · risk analysis
Pay Attention To
Risk
Litigation fallout from the $263M ad-tech glitch
the lawsuits matter for more than legal cost. they test whether advertisers and investors still trust management's controls.
Trend
Whether 2026 revenue actually gets to $7B
the street is modeling roughly $1.1B of added revenue this year. if that slips, the growth story gets thinner fast.
Calendar
The next earnings report
watch margin and EPS more than user headlines. this business has scale already. what it needs now is proof that scale pays.
Metric
Perplexity's $400M integration deal
if the rollout lands well in early 2026, it shows Snap's audience can attract outside dollars beyond plain ad spend. if it stalls, it was just an interesting headline.
Analyst Rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts expect weaker price action than the average stock over the next year.
risk profile
below average
stability score 4 — this is riskier than most stocks, so you should expect larger swings.
chart momentum
below average
technical score 4 — the tape has not earned the benefit of the doubt yet.
earnings predictability
50 / 100
halfway predictable means half the story can still surprise you.
Source: institutional data
Institutional Activity
institutions have been net buying for 2 consecutive quarters — 257 buyers vs. 231 sellers in 3q2025. total institutional holdings: 0.7B shares. net buying for 2 quarters.
Source: institutional data
Price Targets
3-5 year target range
$5
$15
$8
Current price
$10
Target midpoint · +33% from current · 3-5yr high: $11 (+45% · 10% ann'l return)
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