Snap saw its share price rise 10% over the past week, coinciding with the announcement of a partnership with Later. This collaboration enhances capabilities for brands and creators, potentially attracting investor interest due to the focus on growth in influencer marketing. Despite a challenging tech sector marked by selloffs in major companies like Tesla and Nvidia, Snap's impressive price movement suggests positive reception to the new partnership. While the broader market rose 3% amidst economic uncertainties, Snap's gains stood out, highlighting the market's acknowledgment of their innovative approach amidst shifting strategies within the tech sector.

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Over the past year, Snap Inc.'s total shareholder return, including share price and dividends, declined by 14.85%. This stands in contrast to the broader market, which saw a 10.5% increase. The company also underperformed the US Interactive Media and Services industry, which enjoyed a 17.4% return. A key factor was insider selling over the past three months, which may have signaled concerns internally. Additionally, a challenging market environment and Snap's expensive valuation metrics likely put downward pressure on its shares.

Despite Snap's efforts to improve, such as a significant revenue increase reported in their Q4 and FY 2024 results, these weren't enough to offset earlier performance challenges. The company's expensive price-to-sales ratio relative to similar industry players and broader market conditions also affected investor sentiment. Legal challenges, including ongoing lawsuits regarding alleged platform design issues, further weighed on its long-term performance, overshadowing some positive developments.

Our valuation report here indicates Snap may be undervalued.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:SNAP.

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