What Happened to Snap Stock?
- After soaring higher throughout 2020 on pandemic-related tailwinds, shares of social media company Snap (NYSE:SNAP) have been stuck in a sideways trading range through the first four months of 2021. During that stretch, SNAP stock has bounced between $50 and $70.
Why Did It Happen?
- SNAP won big in 2020 because the pandemic forced everyone inside and on their phones. Investors are concerned that as the physical economy reopens in 2021, consumers are going to ditch their phones and go back to “actually doing things.” This fear is weighing on investor sentiment.
- But recent download data seems to refute this thesis. The U.S. economy has gradually reopened in 2021. No doubt about it. But also throughout the first four months of 2021, Snap’s download ranking among U.S. iPhone apps has increased from an average ranking of ~12 in January, to ~6 in April, according to data we analyzed from AppAnnie.
- In other words, as the economy is reopening, the number of folks downloading and using Snap has gone up… by quite a bit.
Does It Matter?
- We’ve long argued that Snap is actually a great reopening play, because the core use-case of the app — sharing videos and photos — actually coincides with consumers doing things. That is, the more bars, restaurants, and hotels consumers visit in 2021, the more videos and photos of bars, restaurants, and hotels they’ll share through Snap. Snap usage should go up as the economy reopens in 2021.
- This thesis appears currently substantiated by strong app download trends through the first four months of the year.
Snap Stock Forecast
- Snap reports first-quarter earnings on April 22. Recent download data suggests those numbers will be very good. If so, we suspect that this earnings report will be the necessary catalyst to spark SNAP out of its sideways trading range, and push shares closer to $100.
SNAP is a great long-term holding. But it is just one stock of many companies which we feel represents a new wave of technology disruptors positioned to massively change the way the world eats, plays, travels, and works over the next decade.
Each one of these stocks has explosive 10X upside potential.
My top hypergrowth stocks in this megatrend include companies from social media, advertising, streaming TV and iGaming.
Get my complete list of stocks to buy in Digitainment by subscribing to Innovation Investor today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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