Nearly 12% rise in Snap stock after CEO shares 2024 goals with employees

• According to a memo from Snap's co-founder and CEO, Evan Spiegel, the company is projected to have more than 475 million daily active users in 2024, surpassing analysts' predictions of 448 million, as reported by tech publication the Verge on Friday.
• According to Bernstein analyst Mark Schilsky, the memo predicted that full-year advertising revenue growth could exceed 20% in 2024, which is higher than the consensus expectation of approximately 14%.
• CNBC confirmed the figures in the memo, describing them as "stretch, internal targets only."

On Monday, shares of the social messaging company rose nearly 12% after an internal CEO memo was released indicating that the company may outperform expectations for 2024.

In a memo sent in September, Evan Spiegel, the co-founder and CEO of the company, informed employees that they could achieve more than 475 million daily active users in 2024, surpassing analysts' predictions of 448 million, as reported by the Verge on Friday.

The memo stated that its full-year advertising revenue growth could exceed 20% in 2024, according to Bernstein analyst Mark Schilsky in his Tech Specialists newsletter, which is higher than the consensus expectation of approximately 14%.

The memo established a target of $500 million in adjusted EBITDA for 2023, which Bernstein stated would represent a significant surpassing of current analyst predictions of $250 million.

CNBC confirmed the figures in the memo, but Snap characterized them as "stretch goals, internal targets only."

Schilsky urged the company to avoid revealing such goals in employee memos.

Schilsky wrote, "Cease putting out aspirational goals like this! Your shareholders will love you for it." He added, "I'm sure this was an internal memo, but management must have known it would leak."

Snap, like other social media companies including Facebook and Twitter, has struggled to improve its online advertising system after Apple's 2021 iOS privacy update made it harder to track users for targeted ads.

The Russia-Ukraine war and economic uncertainty have made it harder for Snap to operate in the digital advertising industry.

In July, Snap's stock price dropped more than 17% after the company missed analysts' expectations with its guidance for the current quarter.

Schilsky wrote that the stock is close to its lows, expectations are low (although they may have changed after the leak), and the digital ad market is performing well. If SNAP doesn't miss the quarter again, the stock could experience a significant increase (squeeze?) on the next earnings report.

Snap will report its third-quarter earnings Oct. 24.

The numbers in the memo were not projections but goals.