Oliver | MMMT Wealth
Founder of MMMT Wealth, CPA, Technical/Fundamental Analysis
Snap is not a buy despite bullish takes after CEO Evan Spiegel's annual letter, given zero CEO buys in years, out-of-control stock comp and weak margins. Its FCF margin is 7.4% and net margin 14%, versus Reddit's 33% and 45%. If Snap reached about $9.2B of 2030 revenue at roughly 30% net margins, $1.55 EPS at about 26x would mean a $40 stock versus $5.50 today, but a lot needs to go right. x.com
Snap has enriched insiders at shareholders' expense, with insiders paying themselves $11 billion since IPO against a market cap of just $8 billion today. Forcing out Evan Spiegel and cutting the endless stock-based compensation would earn it a chance, and the potential to turn the ship around is real. x.com x.com x.com x.com
Snap is not investable until at least a change in management. Per @HatedMoats, Meta and Google have tried to buy Snap for years, even at 3x its value, and been refused each time. The CEO, who owns about 10%, should take a sale at the right price, such as $30B, or risk being left with nothing. x.com
Snap's Spectacles cannot deliver meaningful commercial value within five years, making a funding partner essential to avoid years of cash burn. At best, they are a prototype, with zero chance of profitability in the next couple of years; the glasses will never sell at the scale needed to make a difference. Without a partner, Snap stock is dead money. Even so, Snap remains a good asymmetric bet on Evan Spiegel changing course, with little downside from here if he does not. x.com x.com x.com x.com
Snap does not deserve to be compared with Reddit; it remains a far weaker business. x.com
Snap is possibly one of the worst investment ideas because its profits are an illusion. Stock-based compensation is 17% of sales, shares outstanding are up 47% since 2017, and free cash flow turns negative after SBC; the $500M buyback just spends shareholder money to offset dilution. Ad revenue grew only 5% in Q4 as TikTok, Reels and Shorts compete, and North American users are falling. An EU child-safety probe risks fines up to 6% of revenue, and age bans loom. Better growth lies elsewhere. … Show more
Snap's European monetization is improving even without user growth. Q2 revenue per daily user rose 36%, from $2.65 in 2025 to $3.62 in 2026, while daily users slipped from 100M to 98M. That leaves room to generate more revenue from the existing audience rather than relying on explosive user growth. x.com
Snap is now a bearish call because stock-based compensation didn't fall materially. That could flip if Evan Spiegel cuts SBC, with Google Cloud opex and monetization able to materially change the picture. x.com
Snap has been treated like an ATM by CEO Evan Spiegel, with no operating income a decade after going public. Its Specs glasses are unlikely to sell at meaningful scale for $2,200 each, and Snap badly needs executives capable of saying no to clearly horrible ideas. x.com x.com x.com
Snap's core business is priced like a cyclical commodity company, with its Specs AR glasses thrown in nearly free. Revenue grew from $4.6 billion in 2023 to $5.9 billion in 2025 and free cash flow from $35 million to $437 million, and management aims to keep the diluted share count stable from 2027. Valuing Specs at about $1 billion leaves core Snap at roughly 7.3x trailing and 5.1x 2027 EV/EBITDA. Better-than-feared Specs teasers and Meta's AR push make the setup asymmetric. x.com
Snap's stock-based compensation is the main problem, and its CEO is a further negative. x.com
