Snap shares tumble 13% following disappointing fourth quarter report

Shares of Snap tumbled 15% successful premarket trading Wednesday, a time aft the institution released a disappointing quarterly report for the 3rd 4th successful a row.

In a missive to investors, Snap called it a "challenging year" that was marked by "macroeconomic headwinds, level argumentation changes, and accrued competition. Revenue successful the company's 4th fourth was up somewhat from a twelvemonth earlier.

Like societal media peers Meta and Twitter, Snap had a unsmooth 2022 arsenic a slowing system led businesses to slash their integer advertisement budgets astatine the aforesaid clip that Apple's iOS privacy update constricted targeting capabilities.

UBS expert Lloyd Walmsley downgraded Snap from buy to neutral, citing accrued contention from different societal media companies similar Meta, TikTok and YouTube. Walmsley reiterated a terms people of $10, which implies downside of 13.5% from Tuesday's close, and trimmed his 2023 gross outlook connected Snap.

"Given the magnitude of contention and Snap's comparatively subscale nature, we spot hazard to gross acceleration," helium wrote successful a Wednesday note.

Analysts astatine JPMorgan said that portion Snap is being impacted by broader challenges successful the manufacture and the macroeconomic environment, it is besides facing important company-specific problems. The analysts said the institution is seeing a continued diminution successful engagement with Friend Stories, and portion it's making immoderate improvements successful advertising, they volition beryllium disruptive to advertisers and revenue.

"It's unclear however rapidly Snap's models volition set to these changes, & it whitethorn instrumentality advertisers immoderate clip to admit the benefits & set their bids/spending accordingly, particularly successful a weaker macro
environment," they wrote successful a enactment Tuesday.

The JPMorgan analysts maintained their underweight standing connected the stock.

Jeffries analysts said Snap's 4th fourth was disappointing, and they lowered their fiscal twelvemonth 2023 estimation by 2%.

"We are acrophobic that SNAP's issues are intensifying, arsenic caller advertisement level changes further unit rev maturation and extent of engagement connected person stories again decreasing y/y," the analysts wrote successful a Wednesday note.

--CNBC's Jonathan Vanian and Michael Bloom contributed to this report