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Snap soars the day after its big earnings beat

  • Snap reported a smaller loss per share than analysts expected and 72 percent revenue growth.
  • The company behind the popular disappearing-message app Snapchat has long trailed rival social media company Facebook in daily active users and is still far from profitability.
  • Snap went public in March at an IPO price of $17 and has struggled to regain that market cap in the months since.

Snap soared in early trading Wednesday, shooting up more than 40 percent after beating Wall Street expectations for the fourth quarter.

The company reported a smaller loss per share than analysts expected, and 72 percent revenue growth when it reported earnings Tuesday night. Snap, which is behind the popular disappearing-message app Snapchat, also reported better-than-expected average revenue per user of $1.53.

The stock surged in after-hours trading, finally moving above its IPO price.

Snap has long trailed rival social media company Facebook in daily active users, and is still far from profitability.

"They are finally catching up," Summit Insights Group analyst Jonathan Kees told CNBC's "Closing Bell" after the report. "But it was only one quarter, one quarter a trend does not make."

Snap went public in March at an initial public offering price of $17 and has struggled to regain that market cap in the months since.

— CNBC's Chloe Aiello contributed to this report.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.