Serenity：The Snapchat Thesis: How a 🐶💩 Stock Re-Rated from Sell to Buy. $SNAP flipped the switch, making…

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这条推文含有财经/市场相关信息或标的符号，核心内容是：The Snapchat Thesis: How a 🐶💩 Stock Re-Rated from Sell to Buy. $SNAP flipped the switch, making their biggest expense a revenue stream. There's two things that SNAP needed to do to grow vs. $META, $RDDT. and... Snapchat finally did it, well one of two. That i…

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The Snapchat Thesis: How a 🐶💩 Stock Re-Rated from Sell to Buy. $SNAP flipped the switch, making their biggest expense a revenue stream. There's two things that SNAP needed to do to grow vs. $META, $RDDT. and... Snapchat finally did it, well one of two. That is: 1. Monetize Memories (Storage) - potential 50%%+ upside. 2. Compete vs Tiktok with a public web app + Tiktok-style feed (1000%+ upside) Snapchat finally flipped the switch with #1 and made their biggest OPEX expense a revenue stream: They monetized storage and deleted wasteful storage. _ Snap brings in $1.35B revenue a quarter and is growing at healthy rates with 1B+ MAU. Despite large revenue numbers, they're not profitable. Why? Because countless people like myself have stored GBs of videos taken from 10 years ago. Snapchat has been paying Google Cloud to store all of that for free. Google Cloud costs just eats so much into its net profits every quarter. So with this recent change - charging users (like iCloud) for storage, which is a huge new revenue stream, On top of reducing OpEx by a massive margin, Snapchat just got a rerating. _ Cloud Cost Breakdown Snap’s cloud infrastructure is one of its largest costs, historically over $2.4B annually (cost of revenue). Most of that is storage + bandwidth for features like Memories and videos. Memories + video archives ≈ 35-40% of cloud spend (estimates) ~90% of users under the 5GB cap (no cost change), but 10% heavy users hold the majority of stored data _ If Snap deletes ~50% of existing stored data (non-paying users’ old videos/photos) Result: 40% of $2.4B = $960M cloud cost baseline tied to Memories 50% reduction in heavy-user storage ~ $480M savings (aggressive est.) After accounting for data migration, partial reallocation, misc: -> Snap may realistically realize ~40% of that, or ~$180–200M OPEX saved annually This goes straight to operating profit + FCF, since it’s a pure cost cut. _ Revenue from Paid Storage (Small User Base Scenario) Assuming a small number of users pay-far less than iCloud’s 60% adoption: MAU: ~900 million, Paying users: 2% (~18 million) Average plan: $2.49/month (most on $1.99 or $3.99 tiers) ARPU: ~$30/year Revenue = 18M × $30 = $540M per year Subtract ~$100M in hosting -> $440M net This revenue is recurring, high-margin, and adds directly to FCF. _ Estimated Combined Annual Impact: OPEX savings (cloud) = +$190M Paid storage revenue= +$540M Storage costs (COGS) = –$100M Net FCF improvement= +$630M _ Valuation Rerating If the market rerates Snap based on ~$850M sustainable FCF: Apply a 35× EV/FCF multiple (typical for growth tech with improving margins) EV ≈ $30B → Market cap ≈ $31–33B Aggressive Multiple FCF est. $850M _ Market Cap 25 × $21.25B EV ~ $22–23B mc (~$13–14/share) 30 x $25.5B EV ~ $26B mc (~$15–16/share) 35 x $29.75B EV ~ $31–32B mc (~$19–20/share) From ~$8.50 today -> potential +50–100%+ upside within 12–18 months, assuming: - Execution is smooth (no major user backlash, but really don't think users would quit.) Personally I'd just pay for it since I used Snap 5-10 years ago but don't want my data deleted. - 3 Fed rate cuts compress discount rates - Investors credit forward FCF Of course, all of this only happens 1 year from now. Also, I'm going off a lot of assumptions, such as 2% of users will pay (eg. Dropbox), vs. ICloud has 60% of users. _ Just thought I'd give a shoutout to @fossinvest, a small account I found while doing DD. They also did the math but used more aggressive calculations + similar idea, I'll give them credit for the image. _ I could be wrong with speculating the numbers (eg. $100-150M opex, and 1% paying users, but even with this FCF gets a huge boost). Either way, this is the largest material change SNAP has made for both revenue generation and operational expense cuts in history and it deserves a re-rating after. Market and hedge funds will now start to price this in since they're forward looking, but will take some time to digest the news.