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    Snap (SNAP) Lifts Growth Outlook, Is The Stock Still Cheap?

    Simply Wall St·09/03/2026 10:25:39
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    Why Snap stock is back in focus after its latest earnings

    Snap (SNAP) is drawing fresh attention after its latest earnings report. The stock has fallen about 7.6% since that release, even as quarterly revenue and adjusted EBITDA moved higher.

    The company reported Q2 revenue up 19% year over year and a very large increase in adjusted EBITDA of about 5x. Management also projected further revenue growth and higher adjusted EBITDA for Q3.

    Alongside this outlook, Snap raised its full year infrastructure cost guidance as it spends more on AI and machine learning. For investors, that mix of higher growth expectations and higher costs is central to the current debate around the stock.

    Snap's recent earnings news comes after a tough stretch for the stock, with the share price return year to date down 31.24% and the 1-year total shareholder return down 22.90%. However, the 30-day share price return of 10.91% hints at some rebuilding momentum as investors reassess its growth potential against higher spending on AI and infrastructure.

    Spot opportunities around Snap by scanning a curated list of AI focused stocks that are also investing heavily in infrastructure through our 55 AI infrastructure stocks.

    Snap has gained more than 10% over the past month while still showing double-digit declines over the past year and year to date. Is most of the rebound already reflected in the stock, or is meaningful upside still ahead as investors reassess valuation next?

    Most Popular Narrative: 23.7% Undervalued

    The most followed narrative currently values Snap at a fair value of $7.33 per share compared with a last close of $5.59. That gap is built on a detailed view of future earnings, margins and how long term investors might price those cash flows using a 10.21% discount rate.

    Accelerating innovation in augmented reality (AR), including the upcoming public launch of Specs AR glasses in 2026 and continuous expansion of the AR developer ecosystem, positions Snap to benefit from both increased user engagement and the creation of premium advertising and subscription revenue streams, which can boost top line revenue and improve gross margins over time.

    Read the complete narrative. Read the complete narrative.

    Want to understand why this narrative sees upside in Snap? It leans heavily on expectations for future earnings, higher margins and a premium profit multiple. Curious which exact revenue and earnings path underpins that price tag? The full narrative lays out those assumptions in black and white.

    Result: Fair Value of $7.33 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, Snap still faces pressure from stronger competitors and ongoing net losses, which could weigh on user engagement trends and challenge the current upside narrative.

    Find out about the key risks to this Snap narrative.

    Next Steps

    After all this mixed sentiment around Snap, it makes sense to look at the full picture of both the concerns and the potential rewards before reacting. To weigh those risks against the upside yourself, start with the 3 key rewards and 1 important warning sign.

    Looking for more investment ideas beyond Snap?

    If Snap has caught your attention, do not stop there. Broaden your watchlist with other focused stock ideas that might suit your goals and risk comfort.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.