Should a New Lawsuit Over Ad Revenue Disclosures Prompt Action From Snap (SNAP) Investors?

• Earlier this week, a shareholder class action lawsuit was filed against Snap Inc., alleging that the company made materially false or misleading statements about its advertising revenue growth rate, with a lead plaintiff deadline set for October 20, 2025.
• This legal development highlights the ongoing scrutiny technology companies may face around their financial disclosures and could influence investor perception of Snap’s transparency and risk profile.
• We'll examine how the new lawsuit, focused on advertising revenue disclosures, could reshape Snap’s long-term investment outlook.

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Snap Investment Narrative Recap

To be a Snap shareholder today, you need confidence in its ability to grow digital ad revenue and expand engagement, especially with Gen Z and Millennials. The recent class action lawsuit around advertising revenue disclosures draws attention to Snap’s transparency, but it does not appear to materially shift the near-term focus: user growth and improving profitability remain the key catalyst and the single biggest risk respectively.

Of all recent company announcements, Snap’s Q3 2025 revenue guidance (US$1,475 million to US$1,505 million) is most relevant. This will be closely watched, as investor sentiment largely hinges on whether Snap can sustain ad sales momentum amid legal scrutiny and competitive pressures in digital advertising.

By contrast, emerging regulatory and legal risks around financial disclosures are information every investor should be aware of because...

Read the full narrative on Snap (it's free!)

Snap's narrative projects $7.6 billion revenue and $831.2 million earnings by 2028. This requires 10.2% yearly revenue growth and a $1.38 billion increase in earnings from -$546.3 million.

Uncover how Snap's forecasts yield a $9.41 fair value, a 31% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have shared 12 fair value estimates for Snap ranging from US$8.23 to US$18.09 per share. While users differ on the stock’s worth, heightened legal and regulatory risks could affect Snap’s financial outlook and challenge your expectations for a turnaround.

Explore 12 other fair value estimates on Snap - why the stock might be worth just $8.23!

Build Your Own Snap Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Snap research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Snap research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Snap's overall financial health at a glance.

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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.

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