Investors are buying Snap Inc. stock after the company’s owner, the disappearing communication platform Snapchat, stunned Wall Street by reporting a quarterly profit for the first time.
The stock surge came after Meta, the parent company of Facebook, experienced its greatest one-day stock price loss in history on Thursday, demonstrating that, while internet and social media businesses are sometimes bundled together by Wall Street, their fortunes often diverge.
“With strong daily active user growth in all regions, including North America,” noted Insider Intelligence analyst Jasmine Enberg, “Snapchat is definitely not as prone to the ‘TikTok effect’ as Meta.” She alluded to Facebook’s slowing user growth, which she attributed in part to competition from TikTok, a popular video-sharing app.
Nonetheless, majority of Snap’s growth, according to Enberg, comes from India, where TikTok is illegal.
Snap, based in Santa Monica, California, reported a profit of $22.6 million, or 1 cent per share, in the fourth quarter, compared to a loss of $69 million, or 8 cents per share, a year ago. According to FactSet, analysts expected it to lose 9 cents per share in the most recent quarter.
Revenue increased by 42% to $1.3 billion. Snap’s average daily user count also increased in the fourth quarter, rising 20% year over year to 319 million.
This story has been updated to include analyst Jasmine Endberg’s correct pronoun.
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