Can SNAP ride the Metaverse bandwagon?

-

 Most people including investors on social media don't need an introduction to Snap Inc., (SNAP). 




Based on its profile on Yahoo.com, Snap operates as a camera company in North America, Europe, and internationally. The company offers Snapchat, a camera application with various functionalities, such as Camera, Communication, Snap Map, Stories, and Spotlight that enable people to communicate visually through short videos and images.

As investors and analysts know very well, it is not enough to be a successful and promising company to be a promising and great investment. While SNAP has come a long way since its post-IPO bottom of  around $8-9, it has also fallen a lot from its 52 W high of $83.34, which may also be its All Time High (ATH).

Just like other Social Media names like FB - Meta Inc and TWTR - Twitter Inc, SNAP has also been hit by recent tech/growth stock market wreckage since November 2021.

While SNAP's price got a lift from being associated with Metaverse and all the initial excitement around it, it was also a victim of the subsequent fall of momentum, once the reality of its real world use and applications caught up and the market digested impact of privacy controls of AAPL - Apple Inc on its app's monitoring of user data.

Despite being a heavily used app by Gen Z and other young generations, Snap has to contend with competition from Instagram, owned by FB and Tik Tok from BDNCE - Byte Dance. 

Though Metaverse is still in its early stages, it seems to be concept and application with a lot potential for companies that can leverage their Augmented Reality (AR) and Virtual Reality (VR) skills. SNAP looks to be such a name with AR innovation associated with it. 

Though it is not cheap by conventional valuation metrics such as EPS or P/E, it seems to have the potential to raise both, if Metaverse takes off in the medium to long term. 


 






Comments

Post a Comment

Popular posts from this blog

What to switch into from GM

-
My problem with allocation and stock rotation in my IRA portfolio may not be as simple and straight as the title of the post sounds. Recently, I added to my my existing position in General Motors - GM  , which I am having second thoughts about. Despite having potential to grow and find a foothold in the electric and hybrid passengers vehicle market, compared to Ford - F, GM hasn't been doing very well in the 2nd half of the year. Some of the gains of the 1st half of the year have dissipated due to challenging conditions in the passengers vehicle market that has been impacting most players, including the Japanese big three (Toyota, Honda and Nissan). GM is also in the initial stages of a strategic shift to electric and hybrid vehicles, including autonomous and semi-autonomous vehicles and driving. The wrangles it is having with its workforce and inability to strike a deal so far with the UAW is also weighing in on the market perception and sentiment towards this ticker. Unfor...
Read more

Some thoughts about Mutual Funds in India

-
The ' Responsible Investor' is generally skeptical of investing in Mutual Funds, whether in India or elsewhere in the world. The aim of any diligent investor would be to outperform market averages over the long term. Mutual Funds are for want of a better term more like investment herds and usually track mass investor psychology and cannot consistently take decision independent of underlying market conditions. For instance in US it is common for more than 90% of the MF's to underperform the market average. While it can be argued that this is not the case with Indian MF's so far, it could be just a case of the law of averages not yet catching up with our MF's. It can be safely predicted that given adequate time, Indian MF's will equal or surpass US MF's in underperformance Most of the impressions about Indian MF's perfomance are based on recent history and the bull market of the last 5 years has a lot to do with that There is one aspect in which Indian...
Read more

Prospects and considerations relating to investing in Pandemic-hit industries and sectors

-
Many active investors and fence-sitting investors are tempted alike, to look at and consider staking out positions in companies and industries that are hit by the Covid-19 lockdown and its unfolding impact. Some members of  a Whatsapp Investment group that I contribute to and administer, had questions about the strategy of entering into Airline stocks such as UAL - United Airlines and DAL - Delta Airlines. There is always a temptation to pick up once front line stocks that have fallen close to 52 week lows, in the hope of catching its eventual rebound and  ride it through when the recovery gets underway. Some of that fancy also seems to be validated by the kind of stock price recovery that happened with UAL. UAL has rebounded more than DAL, in spite of having its profitability prospects hit worse than that of DAL. Then there is a recent  article on Seeking Alpha that suggests going long on JBLU - Jet Blue because it has a better balance sheet than most of its peers....
Read more