(Bloomberg) — Snap Inc. shares jumped, reversing an earlier decline, after the social-media company said it expects to post revenue growth of 50% or more for several years, buoyed by investments in more engaging advertising and innovations in augmented reality.
The company, parent of the Snapchat app, is “in a position to drive multiple years of 50%-plus revenue growth,” said Peter Sellis, senior product director, in a presentation Tuesday at Snap’s first-ever investor day. At the event, executives outlined a vision for how Santa Monica, California-based Snap will boost its audience while maintaining user privacy and trust.
The rosy forecast could help assuage concerns that Snapchat, trading near a stock record, might be peaking in growth. The company still has room to expand after its increased popularity during the pandemic, when advertisers have started to understand the value of Snap’s augmented reality tools, which let people try on products virtually. Many marketers also see Snapchat as an alternative venue for ads amid the political turmoil and misinformation on other social media sites.
Snap shares rose to $64.97 at 1:50 p.m. in New York. They had climbed as much as 6.7% following the comments, after falling more than 10% earlier in the day. The stock is up more than 30% so far this year.
Analysts, on average, project sales will rise 48% to $3.72 billion this year, according to data compiled by Bloomberg. Snap’s growth is estimated to be 37% for 2022 and 33% for 2023.
(Updates with context on Snap’s growth in third paragraph.)
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