Snap, Inc (NYSE:SNAP) is set to print its second-quarter financial results after the markets close on Thursday. Analysts expect Snapchat's parent company to report an earnings loss of 1 cent per share on revenues of $1.14 billion for the quarter ending March 31.
Ahead of the earnings print, a number of analysts have weighed in on Snap, with all the firms lowering their price targets. On Thursday, KeyBanc analyst Justin Patterson maintained an Overweight rating and lowered the price target from $27 to $25. Deutsche Bank analyst Benjamin Black maintained a Buy rating and lowered Snap’s price target from $30 to $25.
When Snap printed its first-quarter earnings report on April 21, the stock closed the following trading day slightly higher but then continued lower in its downtrend, which eventually brought Snap to a 52-week low of $11.88 on June 15.
For that quarter, Snap reported a 2-cent loss per share on revenues of $1.06 billion, missing the estimate of EPS of a penny on revenues of $1.07 billion. Snap’s daily active users for the quarter increased 18% year-over-year to 332 million.
From a technical perspective, Snap looks set to trade higher due to several bullish signals that have developed on the stock’s chart. Of course, holding a position in a stock over earnings can be akin to gambling, as stocks can rise following an earnings miss and fall after reporting a beat.
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The Snap Chart: Snap was spiking up almost 5% higher on Thursday as it continued in its uptrend, which began on June 15. The most recent higher high within the pattern was printed on July 8 and $15.30 and the most recent higher low was formed at the $13.15 mark on July 14.
On Thursday, Snap was entering into the lower range of a gap that was left behind on May 24. The gap exists between the $15.87 and $21.71 range and is about 90% likely to fill in the future. If the stock receives a bullish reaction to its earnings print, traders can watch to see if the stock rejects at the upper range of the gap.
Eventually Snap will need to retrace to print another higher low above the $13.20 mark, but if the stock closes the trading session near its high-of-day price, higher prices are likely to come on Friday. If Snap closes the session with an upper wick, the next higher high may be in and Snap could retrace on Friday.
Snap has resistance above at $16.43 and $18.25 and support below at $14.58 and $12.84.
