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Will Snapchat’s New Android App Really Help Spur Growth?

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Feb. 28 2019, Published 1:37 p.m. ET

Snap’s stock has more than doubled since December 21

Snapchat-parent Snap (SNAP) stock rose 4.2% on Monday, February 25, to reach a near six-month high of $10.1. The stock has more than doubled in two months after it had troughed at $4.8 on December 21, 2018. The stock is still down nearly 50% since February 12, 2018. The stock has had a particularly good performance since it announced its fourth-quarter earnings earlier this month. The company posted robust revenue growth, and net losses contracted.

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Snap’s stock was on a downward spiral for most of the previous year due to a shrinking user base, which was due to backlash due to the company’s major update on its app. The company has remained notoriously stubborn about bringing back its well-liked older version. However, the social media company has reversed some features since.

Snapchat is set to launch its improved Android app later this year

Apart from improving financials, Snap’s stock has been rising for another reason. Investors hope that the upcoming improved version of its Android app will help boost its daily active users (or DAU), especially in emerging markets. While Snapchat didn’t lose any more users in the fourth quarter, it lost 5 million DAUs in the previous two quarters.

Snap has prioritized its Apple iOS app, which has slowed progress. However, Snap CEO Evan Spiegel said on Monday that the improved version of the Android app will be rolled out globally by the end of this year, which is what caused the stock to pop.

While an increase in Snapchat’s DAU is definitely welcome, the new Android app will mostly help increase the user base in the emerging markets, which, as the graph shows, aren’t as lucrative as North America.

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