Snap and 3 other Internet stocks will be sold in November | Wbactive

Macroeconomic and geopolitical headwinds have impacted the stock market this year. The Fed’s aggressive rate hikes have hurt high-growth tech stocks significantly.

The tech-heavy Nasdaq Composite is down 28.5% year-to-date. Several Internet stocks have missed earnings estimates due to macroeconomic challenges. And many of them have recently announced layoffs and hiring freezes to cut costs.

Fed Chair Powell has warned that the final rate level will be higher than expected, leading many economists to believe the economy will slip into recession next year. A recession can further hurt the profitability of internet companies as companies reduce their ad spend and consumers avoid spending voluntarily.

With that in mind, it might make sense to review fundamentally weak internet stocks Snap Inc. (SNAP), IAC Inc. (IAK), Zhihu Inc. (ZH) and ContextLogic Inc. (WISH).

Snap Inc. (SNAP)

SNAP is an international camera company. It offers Snapchat, the popular camera application that allows people to communicate visually through short videos and pictures. It offers Spectacles, an eyewear product affiliated with Snapchat, and offers promotional products.

For the fiscal third quarter ended September 30, 2022, SNAP’s non-GAAP net income decreased 50.8% year over year to $132.06 million. Adjusted EBITDA fell 58.3% year over year to $72.64 million while not GAAP eps was $0.08, down 52.9% from the same quarter last year.

SNAP earnings per share for the quarter ended December 31, 2022 are expected to decrease 45.8% year-on-year to $0.12. Over the past year, the stock is down 79.9% to close the last trading session at $11.07.

SNAP’s weak fundamentals are reflected in its POWR ratings. The stock has an overall rating of D, which equates to a Sell in our proprietary rating system. The POWR ratings evaluate stocks based on 118 different factors, each with its own weighting.

Within the F rating Internet 53rd out of 59 stocks in the industry. The company has an F grade for growth and a D for dynamism, stability, mood and quality.

click here to see the SNAP rating.

IAC Inc. (IAK)

IAC is a global media and internet company. The company publishes original and engaging digital content in the form of articles, illustrations, videos and images. It also operates a digital marketplace connecting household professionals with consumers under the Angi Ads, Angi Leads and Angi Services brands.

Total assets of IAC for the third fiscal quarter ended September 30, 2022 decreased 15.1% to $10.44 billion compared to $12.30 billion for the fiscal year ended December 31, 2021. Total operating loss increased 288.8% year over year to $124.68 million, while total operating costs and expenses increased 49.1% year over year to $1.42 billion.

Net loss attributable to IAC shareholders was $63.82 million compared to net income attributable to IAC shareholders of $60.69 million. Additionally, loss per share was $0.74 compared to EPS of $0.65.

IAC’s EPS for the quarter ended December 31, 2022 is expected to be negative at $0.17. Revenue for the quarter ended March 31, 2023 is expected to decrease 7.1% year-on-year to $1.23 billion. Over the past year, the stock is down 64% to close the last trading session at $49.45.

IAC’s bleak prospects are reflected in its POWR ratings. The stock has an overall rating of D, which equates to a Sell in our proprietary rating system. It is ranked 45th in the same industry. It has a D grade for growth, dynamism and stability.

We’ve also assigned IAC grades for Value, Vibe and Quality. Get all IAC ratings here.

Zhihu Inc. (ZH)

ZH, headquartered in Beijing, People’s Republic of China, operates an online content community in China. Its community allows people to seek inspiration, find solutions, make decisions, and have fun.

In the second quarter of the fiscal year ended June 30, 2022, ZH’s total assets decreased by 13.7% to RMB7.19 billion (US$1.01 billion), compared to RMB8.33 billion ( $1.17 billion) for the year ended December 31, 2021.

The company’s operating loss rose 31.4% year-on-year to RMB460.65 million (US$65.04 million). Adjusted net loss rose 121.5% year-on-year to RMB443.78 million (US$62.66 million). In addition, net loss per share rose 45.9% year-on-year to RMB1.59.

ZH’s loss per share for the quarter ended September 30, 2022 is expected to increase 366.7% year-on-year to $0.14. Revenue for the same quarter is expected to decline 4.7% year over year to $122.92 million. Over the past year, the stock is down 85.3% to close the last trading session at $1.32.

ZH’s bleak prospects are reflected in its POWR ratings. The company has an overall rating of D, which is a Sell. It ranks 46th in the internet industry. In addition, it has a D grade for growth, dynamism, stability and quality.

click here to see ZH’s other reviews for value and feel.

ContextLogic Inc. (WISH)

WISH operates worldwide as a mobile e-commerce company. It operates Wish, an e-commerce platform that connects users with merchants. The company also offers marketplace and logistics services to merchants.

WISH revenue for the third quarter ended September 30, 2022 decreased 66% year over year to $125 million. The company’s net loss increased 93.8% from the prior-year period to $124 million. Additionally, adjusted EBITDA loss increased 216.7% year over year to $95 million, while net loss per share increased 80% from the year-ago quarter to $0.18.

Analysts expect WISH’s earnings per share to remain negative for the quarter ended December 31, 2022. Revenue for the quarter ended December 31, 2022 is expected to decrease 48% year-on-year to $150.40 million. Over the past year, the stock is down 85.3% to close the last trading session at $0.75.

WISH’s bleak prospects are reflected in its POWR ratings. The stock has an overall rating of F, which equates to a Strong Sell in our proprietary rating system. It is ranked 54th in the same industry. It has an F grade for stability and a D for growth and quality.

To see WISH’s other assessments for Value, Momentum and Sentiment, click here.


SNAP shares traded at $10.93 per share on Thursday afternoon, down $0.14 (-1.26%). Year-to-date, SNAP is down -76.76% versus a -16.26% gain in the benchmark S&P 500 over the same period.

About the author: Malaika Alphonsus

Malaika’s passion for writing and interest in financial markets led her to pursue a career in investment research. With a degree in Economics and Psychology, she intends to help investors make informed investment decisions. More…

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