Shares of Snap Inc. (NYSE: SNAP) have skyrocketed by 11% in Monday’s trading, following a media report suggesting that the social media company is on track to beat Wall Street expectations by amassing over 475 million daily active users (DAUs) by 2024.
The Verge disclosed this user number last Friday, referring to an internal memo from CEO Evan Speigel to employees. This figure notably surpassed Visible Alpha’s estimate of 447 million DAUs.
These higher-than-expected DAUs offer much-needed relief to the Snapchat parent company, as the company has been grappling with fierce competition and a sluggish advertising market.
The report also reveals that Snap expects advertising revenue to grow by over 20% in 2024, outperforming Wall Street estimates of 14%.
Mark Schilsky, an analyst at Bernstein, conveyed to Reuters that market expectations for Snap have been “incredibly low.” However, he added, “Even I have to admit that the stock would likely be materially higher if they hit this goal.”
Snap (NYSE: SNAP) was the first social media company that relied on advertisements to sound the alarm on a demand downturn last year, as brands tightened their budgets amidst rampant inflation and soaring interest rates. Furthermore, the platform faced challenges at a macroeconomic level, along with fierce competition from other platforms like TikTok. All these factors led to an 80% decline in Snap’s valuation in the past year.
The report also mentions that Snap has almost achieved only one of its nine targets: increasing daily content watch time by 10%.