This Number Holds the Key to Snapchat's Future

Three months ago, Evan Spiegel, the CEO of Snap (NYSE: SNAP), suggested that raising Snapchat's average revenue per user (ARPU) would be the key to raising the value of Snap stock. It may not have been his intent at the time, but the market certainly listened. Now it's arguably become the most important data nugget investors will be looking for in its third-quarter report, due after the market closes on Tuesday, Oct. 22.

The make-or-break target is $2.11, according to estimates compiled by Zacks Investment Research. That figure jibes with other analyst guesses, and would mark a 32% year-over-year improvement. But given that Snapchat is still a relatively new and somewhat unpredictable operation, any significant improvement on Q2's ARPU of $1.91 could prove palatable.

Either way, investors may want to keep in mind that Tuesday's figure is only a milestone en route to per-user revenue closer to the kinds of numbers rivals like Facebook (NASDAQ: FB) and Twitter (NYSE: TWTR) are putting up.

Source Fool.com