Snap, Inc's (NYSE: SNAP) gloomy forecast revision is not an isolated event but a broader trend, according to Loup Funds Managing Partner Gene Munster.
What Happened: On Monday, Snap said it expects to miss its previously-issued guidance on revenue and adjusted EBITDA for the second quarter, causing its shares to slide in extended trading.
What Led The Tempering? This is the first time in a very long time that a company has guided down, just a month after issuing an outlook, Munster said in a series of tweets, adding that it was "a big deal."
The analyst is of the view the weakness may have to do with soft advertising dollars and/or competitive pressure.
"It's likely advertisers starting to pare back some of their budgets."
While noting that Snap isn't a bellwether like Meta Platforms, Inc. (NASDAQ: FB) or Alphabet, Inc. (NASDAQ: GOOGL)(NASDAQ: GOOG), Munster said the company is still "representative of a rapidly changing environment around where the economy is going."
Related Link: Snapchat Parent Brings A New Slate Of Original Content For You And Details AR Shopping Tools
Read-Across For Near-term? Snap's warnings, according to the analyst — best known for his bullish stances on Apple Inc. (NASDAQ:AAPL) and Tesla Inc. (NASDAQ:TSLA) — may have implications for the June and September quarters.
"I think we're going to hear more commentary like we heard from Snap," he said.
"I hope I'm wrong, but I think we're going to hear that."
Munster, however, is hopeful of things improving in 2023. The weakness seen in 2022 sets up 2023 for a great year once all these growth rates start to rebase, the analyst said.
Price Action: Snap plunged 30.97% to $15.51 in after-hours trading Monday, according to Benzinga Pro data.
