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A Technical Analysis of Snap’s Ratios

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Shareholder returns

Snap (SNAP) has generated investor returns of 14.2% in the trailing-one-month period and -41.6% in the trailing-12-month period. The company’s share price has risen 15.0% in the trailing-five-day period.

Peer companies PayPal (PYPL), eBay (EBAY), Baidu (BIDU), and Yandex (YNDX) have generated investor returns of 58%, 10.6%, 39.1% and 34.8%, respectively, in the trailing-12-month period.

Moving averages

On June 5, Snap closed the trading day at $12.32. Based on this figure, here’s how the stock fared in terms of its moving averages:

  • 17.9% below its 100-day moving average of $15
  • 5.2% below its 50-day moving average of $13
  • 12.0% above its 20-day moving average of $11

Inside Snap’s price and valuation multiples

Snap’s 2017 book value per share of $2.2 compares with its expected book value per share of $1.7 for 2018. Snap’s shares are trading at a price-to-book value of 5.5x. The company’s 2017 price-to-sales ratio of 17.1x compares with its estimated 2018 price-to-sales ratio of 13.2x.

Analysts’ recommendations

Of the 35 analysts covering Snap, six have given it “buy” recommendations, 12 have given it “sell” recommendations, and 17 have given it “hold” recommendations. Analysts’ stock price target for the company is $11.76, and their median price target for the company is $11.75.

Relative strength index

For the last 14 days, Snap has an RSI (relative strength index) of 74 compared to the RSIs of 77, 58, 43, and 54 recorded by PayPal, eBay, Baidu, and Yandex, respectively, within the same period.

Interest coverage ratio

Can Snap easily pay interest on its outstanding debt? The answer lies in examining the company’s EBIT-on-interest ratio, also called its interest coverage ratio, which in this case is -1,802.91x.

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