Snap Inc. bullish investment thesis evidently appears across an interesting piece written by Antonio Linares on his Substack, Antonio’s Investment Ideas. We will present in this article a summary of the most important points in support of the bullish case for SNAP. As of July 21, Snap Inc. shares were trading at $9.88. According to Yahoo Finance, the company’s forward P/E ratio stood at 40.32.
After crashing more than 87% from its peak in late 2021, Snap Inc. has largely been written off by the market. However, its core fundamentals suggest there’s an overlooked opportunity here. Daily Active Users (DAUs) have grown from around 375 million in Q4 2022 to 460 million in Q1 2025, placing Snapchat among the top global social media platforms with approximately 900 million Monthly Active Users (MAUs).
Even though revenue per DAU dipped slightly from $12.2 to $12.02 — due to expansion into lower-ARPU emerging markets — Snap’s monetization initiatives, especially Snapchat+, have gained impressive traction. Snapchat+ was on track to hit an annual revenue run rate of $600 million in Q1 2025, an increase of 75% over the last year. There have been some good showings in free cash flow per share after management started concentrating on operations back in early 2024. This has been driven by tighter operations, improved ad effectiveness, and more diversified revenue streams.
Advertiser growth is also robust — the number of advertisers rose 60% year-over-year, supported by efforts to scale Snap Promote and direct-response advertising. But Snap’s ad-supported in-app assistant called “My AI,” which implements AI technologies within Snapchat, has quickly picked up user counts.
Although total debt has surpassed cash since 2022, the growing operating cash flow is helping offset balance sheet risks.
At just 2.7x sales, Snap is trading at a significant discount compared to peers like Spotify, which has similar network dynamics but trades at 9x sales. Improvements in revenue per user, especially via subscriptions and AR commerce, could unlock strong growth ahead. The current market pessimism offers an attractive risk/reward setup.
With the bullish Snapchat thesis, LongYield coverage was run informing us that DAU growth, 75% yearly revenue hike for Snapchat, and improved profitability are on the cards. Since then, the stock has climbed about 26% as operational improvements started reflecting in the results. With continued growth in monetization and users, the bullish thesis remains intact.
Antonio Linares echoes this view but puts special emphasis on Snap’s low valuation despite improving fundamentals.
Snap Inc., according to the database, is not listed amongst the 30 most popular stocks held by hedge funds. Up until the end of Q1, the number of hedge funds holding SNAP had declined to 39 from 44 in the prior quarter. We see investment possibilities with Snap; however, some AI stocks do seem to have good upside at a relatively safe downside risk.
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