Snap Stock Makes New Low Into Earnings – What To Expect Next

Snap’s stock price (NYSE:SNAP) made a new low today at $5.87, before steadying slightly to $6.06 for a 0.67% dip on the day. This comes as Snap reports Q4 2025 results after market close, testing whether management’s Q4 revenue guidance of $1.68B to $1.71B proves conservative.

Consensus sits at $1.69B revenue and -$0.12 EPS, essentially in line with the guided midpoint, creating a setup where forward commentary will matter more than the backward-looking print.

The stock trades precariously close to 52-week lows, down 47.8% over the past year and 25.5% in the past month alone. That decline reflects sustained skepticism about Snap’s ability to compete for ad budgets against Meta and Alphabet in a choppy demand environment.

Management flagged potential Q4 DAU pressure tied to age verification and regulatory compliance, explicitly signaling a willingness to sacrifice near-term engagement for monetization efficiency.

The 2026 setup is the real constraint. After withholding Q2 2025 guidance due to macro uncertainty, then delivering a Q2 miss that reset expectations lower, Snap regained some credibility in Q3 by guiding Q4 tightly to consensus and announcing a $400M Perplexity AI partnership. A repeat of the “we cannot guide” posture would likely trigger another estimate reset and further multiple compression.

Consensus Estimates

The consensus $1.49B revenue estimate for the current quarter (Q3 2025, reported November 5) sits at the midpoint of management’s $1.48B to $1.51B guidance range, while the Q4 2025 consensus of approximately $1.69B aligns with management’s $1.68B to $1.71B guided range. This tight alignment suggests limited near-term estimate dispersion, which tends to reduce surprise volatility but increases sensitivity to forward guidance.

Management Guidance & Commentary

“We guided Q4 revenue $1.68B to $1.71B, reflecting continued momentum in our advertising business while acknowledging potential headwinds from our investments in compliance and age verification.”

Management’s Q4 revenue guidance of $1.68B to $1.71B landed essentially in line with the Street’s $1.69B expectation at the time of the Q3 report. That alignment marked a departure from the Q1 2025 episode, when Snap explicitly declined to provide Q2 guidance due to tariff-led economic uncertainty and advertising budget risk.

“DAUs could decline in Q4 due to investment priorities and anticipated impacts from age verification and evolving regulation.”

The explicit warning about potential Q4 DAU declines represents a strategic signal that near-term engagement could be sacrificed for compliance and monetization efficiency. This framing shifts the debate from pure user growth to ARPU and margin durability.

Sector & Peer Comparison

Snap trades at a significant valuation discount to larger digital advertising peers, reflecting both its GAAP unprofitability and structural concerns about competitive positioning. Meta delivered 23.8% revenue growth with a 38.2% profit margin, while Snap’s 8.6% negative operating margin explains the valuation gap.

Earnings Track Record

Snap has beaten EPS estimates in 15 of its last 19 quarters, a 78.9% beat rate with an average surprise of 80.6%. However, the beat rate alone does not translate into sustained stock performance, as forward guidance drives price action more than backward-looking results.

Post-Earnings Price Movement History

Snap’s post-earnings reactions exhibit a counterintuitive pattern: the stock averages a 2.1% decline on beats and a 7.2% gain on misses. This reflects the market’s tendency to trade forward guidance more aggressively than reported results. The Q3 2025 episode demonstrates this clearly—a 50% EPS beat still produced an 8.2% decline.

Expected Move & Implied Volatility

Options are pricing elevated uncertainty relative to recent realized volatility, consistent with the stock’s 18.8% decline over the past month and proximity to 52-week lows.

The options market is pricing a 12.5% move in either direction following earnings, implying a range of $5.25 to $6.75 from the current $6.00 price. The elevated implied volatility reflects uncertainty about whether management provides explicit 2026 guidance or reverts to the cautious posture that triggered estimate resets earlier in 2025.

The $400M Perplexity partnership announced in Q3 needs to move from strategic narrative to quantified financial impact; specifics on timing and expected contribution would support the bull case.

The Q4 2025 report will be judged primarily on whether management can restore confidence in the 2026 setup. A positive surprise would require revenue landing above $1.70B, stable or modestly declining DAUs that validate the age verification tradeoff, accelerating ARPU growth, and explicit 2026 guidance that frames direct-response ad improvements and AI monetization as durable growth drivers.