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Analysis of Snap’s Key Valuation Metrics

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Enterprise value multiples

On May 5, 2017, Snap (SNAP) was the world’s third-largest Internet player in terms of market capitalization at ~$27.9 billion. Among its peers, Alphabet (GOOGL) had a market cap of $646.3 billion, Facebook’s (FB) market cap was ~$433.5 billion, Twitter’s (TWTR) market cap was ~$13.8 billion, and Yelp’s (YELP) market cap was $2.9 billion.

On the same date, Snap was trading at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] multiple of approximately -42.7x. Its peers Alphabet, Facebook, Twitter, and Yelp had EV-to-EBITDA multiples of ~12.8x, ~17.1x, ~18.2x, and ~14.9x, respectively. Enterprise value is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization.

Twelve out of the 35 analysts covering Snap (SNAP) stock recommended a “buy,” 16 recommended a “hold,” and seven recommended a “sell.”

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Median target estimate

Snap stock’s median price was set at $24. A price target refers to a stock’s projected price level set by an adviser or investment analyst. The price target is that price that, if achieved, yields the highest level of returns from the investment.

 

Moving average convergence divergence

The moving average convergence divergence (or MACD) refers to the difference between a stock’s long-term and short-term moving averages. The company recorded a MACD of 0.97 in the last 14 days.

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