Snap prepares for brutal day on Wall Street following latest earnings disappointment

Investors had a rosier outlook when Snap went public past year.

The figure fell short of expectations, helping push shares below $12 and extending a slide in the price since February when it had climbed close to $21 on hopes that the redesign was working.

“First, as we think about our year-over-year revenue growth rates, we are planning for our Q2 growth rate to decelerate substantially from Q1 levels, ‘ chief financial officer Drew Vollero said on a conference call to discuss the results”.

The Facebook (FB) rival reported revenue of $230.66 million, up 54% from the year-ago quarter.

In after-hours trading, Snap’s stock was down $2.70 per share – or 19.14 percent – to $11.43.

However, Snapchat loyalists remained highly engaged as they use the app several times each day and ad formats on Snapchat remain amongst the most creative.

Company executives acknowledged that the new design hurt results but said they were sticking with the plan to keep content from friends separate from other publishers.

The company CEO revealed that, while users on iOS still started to make peace with the redesign, the “performance regressions” on Android primarily contributed to the app’s overall growth troubles. Thill, who maintains a Hold rating on Snap shares, continues to recommend Facebook Inc (NASDAQ:FB) stock as an alternative in the social media arena and is also more positive on Twitter Inc (NYSE:TWTR).

Also fueling the selloff: Snap warned investors that a deacceleration of ad revenues was likely in the coming quarter before picking up again in the second half of the year. SMB revenue growth was up 30 percent quarter over quarter.

Snap said that for its first quarter, it lost 17 cents a share, which was in line with Wall Street analysts’ forecasts. “We are already starting to see early signs of stabilisation”. Has the updated Snapchat app pushed you away from the service or is it just a minor issue that is easy to deal with?