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YouTube-parent Alphabet (NASDAQ:GOOGL) Inc, Facebook-parent Meta Platform Inc, Pinterest (NYSE:PINS) Inc and Twitter Inc (NYSE:TWTR) all slid between 1.7% and 9.2% in premarket trade.
“We believe Snap is facing increased competition, primarily from TikTok, both for time spent and increasingly for ad dollars, which is compounding the challenges of a softer macro and Apple (NASDAQ:AAPL)’s (privacy-related) changes,” Atlantic Equities analysts said in a note.
The brokerage said competition is likely to continue to increase in 2023.
Snap, on Thursday, reported its slowest revenue growth as a public company for the latest quarter and forecast no revenue growth in the typically busy holiday quarter, while Wall Street analysts were expecting a 3.3% rise, according to Refinitiv data.
The company had said in August it would lay off 20% of its employees and discontinue projects such as gaming and a flying camera drone to cut costs and brace for a deteriorating economy.
“Given SNAP had been growing headcount over 30% y/y for 4 straight quarters, we wonder if the company can execute on its lofty growth objectives with a 20% smaller employee base,” Jefferies analysts said in a note.
Snap’s stock, now trading at $8.06, has lost about 77% of its value so far this year, while Alphabet, Meta and Pinterest have lost between 30% and 60%. Twitter, however, has gained 21% on the prospect of billionaire Elon Musk buying the company.
