2 Reasons Snap Stock Looks Like a Buy After Reporting Earnings

Shares of Snap (NYSE: SNAP) have soared over 80% since the end of March. Most of those gains came following Snap's first-quarter earnings report in April, which showed revenue advancing by 44% year over year. But management revealed a deceleration in revenue growth starting in March as advertisers pulled back on spending. That deceleration came back to bite Snap in the recent quarter.

The company reported year-over-year revenue growth of 17% for the second quarter. The stock has given back some of its recent gains following this latest report, but the recent dip could be a good buying opportunity.

Snap's basic strategy is centered on attracting a large and engaged user base for Snapchat, and then making that audience available to advertisers to grow revenue. Snap has been rolling out its Dynamic Ads tool for advertisers, and major brands are already seeing returns on their ad spending. Snap has a long way to go to improve its user monetization, but recent results from its Dynamic Ads product leaves the company well positioned when digital ad spending resumes its pre-coronavirus trend. Here are two reasons the stock still looks like a good investment right now.

Source Fool.com