Snap (SNAP) Stock Forecast & Price Target

The recent data indicates a positive trajectory for Snap, showcased by a 9.8% year-over-year increase in sales for 3Q25, reaching $1,507 million, which surpassed the high end of guidance. Snap's user engagement metrics remain strong, with global Monthly Active Users (MAUs) increasing to 943 million and average revenue per user (ARPU) across all regions rising to $3.16, reflecting a 2% year-over-year growth. Notably, the expansion in subscription services, with Snapchat+ adding 1 million new subscribers to reach 17 million and an ARPU increase of approximately 8%, highlights the company's successful diversification efforts and enhancing revenue streams beyond traditional advertising.

Snap's stock outlook is negatively impacted by a forecasted decline in average revenue per user (ARPU), which is projected to decrease to $2.77 in the third quarter, a decrease of 2% year-over-year, as advertising sales remain vulnerable. Additionally, the company's outlook for stock-based compensation has been lowered, indicating potential challenges in controlling costs, with expectations of slower growth compared to prior estimates. Concerns about a decline in daily active users (DAUs), particularly in North America—Snap's most lucrative market—are exacerbated by competitive pressures from short-form video platforms and regulatory developments, creating a challenging environment for future user engagement and financial performance.