How Will SNAP Stock React To Its Upcoming Earnings?

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Snap (NYSE:SNAP) is scheduled to announce its earnings on Tuesday, April 29, 2025. Historically, during the last five years, the stock has demonstrated a negative one-day return following 61% of its earnings releases. These adverse returns have had a median of a significant -17% and a maximum of an astounding -39%. These statistics highlight the considerable volatility typically seen in Snap stock subsequent to its earnings disclosures.

Consensus estimates from analysts for the upcoming report suggest earnings per share (EPS) of $0.04 on sales totaling $1.35 billion. This marks growth when compared to the same period last year, during which Snap reported EPS of $0.03 on sales of $1.19 billion. This projected performance is likely driven by the continued expansion of the company’s paid subscriptions.

For traders focused on events, comprehending Snap’s historical stock behavior following earnings can provide valuable insights. The immediate market reaction will hinge upon how the actual outcomes and future expectations align with investor forecasts. Nevertheless, examining past performance reveals two possible strategies:

1. Pre-Earnings Positioning: By understanding the historical likelihood of a negative one-day return, traders can position themselves strategically prior to the earnings report.
2. Post-Earnings Trading: Analyzing the relationship between the immediate stock reaction and medium-term returns following earnings can guide trading decisions the day after the announcement.

From a fundamental standpoint, Snap currently holds a market capitalization of $14 billion. Over the previous twelve months, the company accrued $5.4 billion in revenue but faced operational losses of $787 million along with a net loss of $698 million.

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See earnings reaction history of all stocks

Snap’s Historical Odds Of Positive Post-Earnings Return

Here are some insights regarding one-day (1D) post-earnings returns:

• Over the last five years, there have been 18 earnings data points recorded, including 7 positive and 11 negative one-day (1D) returns. In summary, positive 1D returns have been observed approximately 39% of the time.
• However, this percentage drops to 10% if we examine data from the last 3 years instead of 5.
• The median for the 7 positive returns = 24%, while the median for the 11 negative returns = -17%

Further data for the observed 5-Day (5D) and 21-Day (21D) returns after earnings is summarized, along with the statistics in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (although not effective if the correlation is low) involves understanding the correlation between short-term and medium-term post-earnings returns, identifying a pair with the highest correlation, and making the appropriate trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader could position themselves “long” for the subsequent 5 days if the 1D post-earnings return is positive. Here’s correlation data based on a 5-year and 3-year (more recent) history. It’s important to note that correlation 1D_5D refers to the relationship between 1D post-earnings returns and the subsequent 5D returns.

Is There Any Correlation With Peer Earnings?

At times, the performance of peers can impact post-earnings stock reactions. In fact, the market reaction may commence before the earnings are announced. Below is some historical data on Snap’s post-earnings performance compared to the stock performance of peers that reported earnings immediately prior to Snap’s release. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

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