Looking from the outside, social media player, Snap (NYSE: SNAP) had a power-packed Q4. From the launch of a global creative AR studio, Arcadia, to partnerships with Sony (NYSE: SONY) and Alphabet (NASDAQ: GOOGL), Snap had its hands full this quarter.
SNAP stock is set to announce its quarterly results for 4Q21 on February 4, giving us a fuller picture. However, we are curious about something the earnings print is not likely to cover — website visit volume in Q4. For this, we used TipRanks’ new tool, which gives us a peek into website visit numbers by the quarter or month, or according to geography. Being a social media company, higher virtual visits to its website means higher potential average revenue per user (ARPU), an important top-line metric.
What User Visit Details Showed Us
We found out from the tool that not only was business hot for Snap in the final quarter of 2021, but the visit volumes to its website were fired up as well. Notably, there was a 35.05% global growth in total estimated visits to the snapchat.com website from the preceding quarter (Q3).
When we threw in Snap’s social commerce website verishop.com to the mix, we noticed a 33.44% quarter-over-quarter growth in website visits globally to 124.1 million estimated users. These numbers uplift our top-line performance outlook.
Moreover, as we dug deeper, we saw that there has been a 52.55% year-over-year growth in total estimated visits to the website globally. This gives us an idea about how the ARPU growth might have performed in the quarter.
Data Points that Substantiate our Findings
Interestingly, Snapchat serves a big chunk of the world’s Gen Z (10-25) and millennial (26-41) age groups. This cohort of users has a tremendous purchasing power of around $4.4 trillion globally, as per a study commissioned by Snap last year. This means that the more the virtual footfall to the site, the more the likelihood of revenue generation at the per-user level.
Moreover, Snapchat’s Daily Active Users (DAUs) are on an upward trajectory. The company had earlier projected Q4 year-over-year DAU growth between 19% and 20%, and revenue growth between 28% and 32%. This is consistent with our expectations of solid revenues, which were buoyed after looking at the website visit volumes in Q4.
Experts Opine
Recently, Jefferies analyst Brent Thill reiterated a Buy rating on the stock. Thill believes that the company’s guidance of around 30% revenue growth was conservative, suggesting that there is a strong top-line upside. Moreover, upon running third-party checks, the analyst found that DAU numbers were trending above Street expectations, which is good news.
Thill, however, lowered the price target to $55 from $65 over “mixed” intra-quarter observations.
Wall Street consensus is also cautiously optimistic about Snap, with a Moderate Buy rating based on 14 Buys and 5 Holds. The Snap stock price prediction shows an average price target of $57.50.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
