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Aug 10 (Reuters) - Snap Inc shares slumped more than 12 percent in extended trading on Thursday after the Snapchat parent reported user growth and revenue that fell short of analyst expectations.
Snap shares have tumbled since their March market debut as investors worry about the company's ability to compete for users and advertising dollars with rivals like Facebook Inc's Instagram, which has features similar to the Snapchat disappearing messaging app.
Snap said its daily active users (DAUs) rose to 173 million in the second quarter, short of the 175.2 million DAUs expected by analysts according to financial data analytics firm FactSet. DAUs were 143 million in the year-earlier quarter and 166 million in the previous quarter.
Snap said average revenue per user was $1.05 in the quarter, below the $1.07 expected by analysts according to FactSet but up from 50 cents a year earlier.
"There is a lot of heavy competition and the company has not figured out how to monetize its audience yet," said Salvatore Recco, executive vice president at 50 Park Investments, an investment advisory service. "Until they do, investors will likely continued to be disappointed."
Snap's shares were down to $12 in extended trading. The stock debuted on March 2 at $24, compared with an initial public offering price of $17.
Instagram Stories allows users to post images and video that disappear after 24 hours, a feature that replicates Snapchat and is fast becoming more popular than Snapchat itself.
Now one year old, Instagram Stories had more than 250 million users as of Aug. 2, up from about 250 million in June and 200 million in April.
Since its debut on the public markets, Snap has described itself as a "camera company," but has given little indication on plans to move into hardware or its broader strategy.
"If that's how (Chief Executive Evan Spiegel) wants to play his cards that's fine, but there's going to be a trade off," said Jason Moser, analyst for Motley Fool. "And that's going to be reflected in the stock price.
Snap said its revenue more than doubled to $181.7 million in the quarter. The company earns some revenue from branded or sponsored filters and lenses, but the bulk comes from advertisements.
Net loss widened to $443.1 million, or 36 cents per share, from $115.9 million, or 14 cents per share. Excluding certain items, Snap lost 16 cents per share in the latest quarter.
Snaps results came on the heels of Blue Apron Holdings Inc reporting a wider-than-expected quarterly loss, erasing nearly a fifth from the meal-kit delivery services market value on Thursday. (Reporting by Aishwarya Venugopal and Anya George Tharakan in Bengaluru; Editing by Savio D'Souza and Meredith Mazzilli)