Should I Buy Snapchat (SNAP)? Finance YouTuber Analysis

The YouTuber is bullish on Snap, highlighting the success of its Snapchat Plus paid subscription tier, which has achieved $1 billion in annual recurring revenue and 25 million subscribers. He notes this represents a fundamental shift in their business model, with annual losses shrinking by 65% and net income seeing a 400% leap in Q4 last year, indicating a strong move towards profitability beyond advertising.

“Snap isn't just an ad company anymore. They've built a second revenue engine that didn't even exist 2 years ago, and it's already at a billion dollar run rate.” — ▶ Watch clip

The YouTuber is strongly bearish on Snapchat, citing excessive stock-based compensation that dilutes shareholders and prevents per-share profit growth, despite revenue growth. He believes the company's management team needs a complete overhaul to focus on sustainable per-share profit growth.

“And until that happens, I am not going to be touching the stock with a 10-ft pole.” — ▶ 1:07:00

The YouTuber purchased Snapchat due to the overall growth in social media platforms like TikTok and YouTube. He acknowledges it's a smaller, more volatile play, which is why it constitutes a very small position in his portfolio.

“Now, Snapchat I purchased because I think social media is taking off tremendously. You look at Tik Tok, you look at YouTube, you look at Instagram and Snapchat just everything is going up and Snapchat's really a smaller play, more volatile, but that's why it's a very small position I have in Snapchat.” — ▶ Watch clip