Snapchat: Activist Calls For 'Year Of Efficiency' (Rating Upgrade)

Julian LinInvesting Group LeaderFollow5ShareSavePlay(10min)Comment(1)SummarySnap Inc. is upgraded to a Strong Buy due to its deeply distressed valuation and potential profitability catalysts.SNAP faces declining daily active users, especially in North America, but shows progress in ARPU and incremental margins.Activist investor involvement and management's renewed focus on profitability could spark margin expansion and multiple rerating.SNAP trades at just 1x sales and 9x non-GAAP earnings, offering significant upside if profit margins improve.Looking for a portfolio of ideas like this one? Members of Best Of Breed Growth Stocks get exclusive access to our subscriber-only portfolios. Learn More » Araya Doheny/Getty Images Entertainment Snap Inc. (SNAP) has been the worst performer in the social media sector. AI has helped the stronger get stronger, furthering the gap to the smaller operators like SNAP. The fundamental picture isn’t exactly pretty here, but the This article was written byJulian Lin37.4K FollowersFollowJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure: I/we have a beneficial long position in the shares of SNAP, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.