Snap is getting crushed, but bulls aren’t throwing in the towel

Snap has had a rough go of it since going public in March, with its market value being cut in half from post-IPO highs. Despite recent weakness, the jury is still out on whether the company will stumble and fail (like Twitter), or if it will pick itself up (like Facebook). What we do know is that Snap will trade around 15 to 20 times earnings, and it’s good news for bulls that the company is cheaper now, because it means the profit threshold for maintaining that valuation will be lower going forward. Key drivers for Snap include user growth and revenue expansion. If either of those stall, the downside scenario is around four times current year revenue, where Twitter now resides.