IB Net Payout Yields Model

Invest like me - only at Covestor.com

Snap: Hidden Subscriber Boom

By -

Updated - April 1, 2026

Snap was insanely cheap at $4. Not sold on selling off the Specs biz, but think an activist can push management to do more, such as hike subscription prices. Irenic appears more focused on taking $500M in savings from Specs and repurchasing cheap shares. 

-Irenic, which has an economic interest of ~2.5% in Snap's Class A shares, wants the company to spin off or shutter its smart glasses business, Specs, according to a Bloomberg report on Tuesday, which cited a letter Irenic sent to Snap Chief Executive Officer and co-founder Evan Spiegel. The activist believes that moves Snap could make could boost its shares to more than $26 each.

-The activist fund also wants Snap (SNAP) to rationalize its cost structure by cutting jobs and changing its compensation structure for employees, according to the report. Irenic also is pushing Snap to concentrate on adopting artificial intelligence to improve ad monetization. Irenic also recommends a stock buyback with the shares so discounted. Snap shares have dropped more than 50% over the past year.

Irenic Snap $26 PT is only 9x EV/EBITDA multiples.... that's like half of where such a business would normally trade, at least 15x EV/EBITDA would be typical.


Original article posted on Feb. 5

  • Snap is experiencing rapid subscription growth, with subscribers up 71% YoY and a near $1B annual run rate.
  • SNAP's Q4 revenue grew 10%, driven by a 62% YoY surge in subscription revenue, despite ongoing ad business challenges.
  • The company trades at just 1.5x 2026 revenue, with strong cash flow and major catalysts in subscriptions and smart eyewear for 2026.
  • I remain ultra bullish on SNAP, urging investors to capitalize on current lows ahead of a subscription business inflection.
Snap, Inc. (SNAP) entered earnings trading near an all-time low despite the company having a promising business setup. The social messaging service is quickly building out a booming subscription service, monetizing AI, and launching a smart eyewear business. My investment thesis remains ultra Bullish on the stock, especially trading near all-time lows around $6 heading into earnings.


Read the full article on Seeking Alpha. 

Disclosure: Long SNAP. Please review the disclaimer page for more details. 

Comments

Post a Comment

Popular posts from this blog

Stat of the Day: VXO hits 45 again

By -
Not hardly a week removed from hitting 45 on 9/18/08 and the market is back to this extreme level. Usually hitting the 40 level has historically been a huge buy signal for at least the next 4-6 months. Below are the times that 40 has been hit and only 2 times did it exceed 45 in the prior 20+ years until this month. Guess time will tell if this one leads to a huge rally. Date High 10/19/1987 152.48 8/24/1990 40.01 10/27/1997 40.04 8/27/1998 41.46 4/14/2000 41.53 3/22/2001 41.99 9/17/2001 47.7 7/11/2002 41.64 9/18/2008 45.81
Read more

Nextdoor: Next Step Up

By -
Image
Update - Feb. 28, 2025 Nextdoor reported another strong quarter.  Q4 Revenue of $65.23M (+17.4% Y/Y)  beats by $2.11M . Adjusted EBITDA was $3.0 million, compared to a $14.0 million loss in the year-ago period, reflecting 30 percentage points of year-over-year margin improvement. The social media company guided to weak Q1 results due to going full speed ahead with the NEXT UI updates. This is great news for  investors, but the stock is down some 30% due to the markets short-term focus.  The stock trades at near cash value of $427 million.  Originally posted on Nov. 8 Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » Nextdoor has achieved a significant turnaround under the return of founding CEO Nirav Tolia, with 17% revenue growth and record WAUs. The company nearly eliminated losses, reporting a Q3 adjusted EBITDA loss of just $1 million, and expects to be cas...
Read more

Snap: Exclusive Engagement Isn't Enough

By -
New report shows Snap has an exclusive user base. Snap must prove the business model though plenty of revenue upside exists with monetizing existing user base. Valuation is extremely stretched despite the opportunity to grow revenues due to unconstrained operating expenses. A new report backs the thesis that  Snap  ( SNAP ) has compelling user engagement that remains sticky. Unfortunately, user engagement is only one part of an investable business model that  my research  has questioned since the IPO. Read the full article on Seeking Alpha.  Disclosure: Long TWTR. Please review the disclaimer page for more details. 
Read more