Snap (SNAP) Surges 7.9%: Is This an Indication of Further Gains?

Snap SNAP shares ended the last trading session 7.9% higher at $6.04. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 20.4% gain over the past four weeks.

Snap's expanding user base, rapid subscription growth, improving ad efficiency through AI tools, increasing advertiser adoption, and meaningful margin and cash flow expansion reinforce its strengthening fundamentals and support optimism for continued upside.

This company behind Snapchat is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $1.52 billion, up 11.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Snap, the consensus EPS estimate for the quarter has been revised 9.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SNAP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Snap is a member of the Zacks Internet - Software industry. One other stock in the same industry, nCino NCNO, finished the last trading session 3.5% higher at $18.08. NCNO has returned 14.7% over the past month.

For nCino, the consensus EPS estimate for the upcoming report has changed +42.9% over the past month to $0.26. This represents a change of +62.5% from what the company reported a year ago. nCino currently has a Zacks Rank of #1 (Strong Buy).

Zacks' Research Chief Picks Stock Most Likely to "At Least Double"

Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research