Snap Inc

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 6✗ 29▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)0/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)0/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-34.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-9.0% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-460.5M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-6.8%

  ✗Lynch> 15%

  EBIT / Enterprise Value-1.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-1.0%, ROC=-4.3%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-6.00%

  ✗PiotroskiROA > 0

  ROA Change YoY-8.79% -> -6.00% (delta: +2.80%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=8.55%, ROA=-6.00%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY53.9% -> 55.0%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-2.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-6.8%

  ✗Dreman> 12%

  Margin of SafetyP/B=4.0x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-34.5% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency0/11 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-1.8%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-6.8%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-30.4% (2023) -> -9.0% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 54.1% -> 55.0%, operating margin -30.4% -> -9.0%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-1.66%; #3507/6340 (top 55.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+42.48%; #886/3702 (top 23.9%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity-6.78%; #3290/5226 (top 63.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0506; #2596/5884 (top 44.1%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years0/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts0% pass✗ 14▾

  Split decision: 13 FAIL · 3 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (2/7)✗GreenblattRank #1900•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (2/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (0/5)•AckmanNEUTRAL (6/9)✗TempletonFAIL (3/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #1859/2370 (Top 78.4%))✗NeffFAIL (2/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag SNAP's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current AssetsLT Debt $3.4B vs NCA $3.0B

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.56, IC: -0.8x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.56

  ✗Lynch< 0.33

  Cash - Long-term Debt$-2.4B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change45.46% -> 45.45%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities3.36

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.56

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.56

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-0.8x, D/EBITDA=57.2x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.56

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.5632; #3621/4210 (top 86.0%)

  ✗AsnessTop 30% of eligible cross-section
• Valuation8% pass✓ 2✗ 26▾

  12 of 13 flag SNAP's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio4.0x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-1.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-1.0%, ROC=-4.3%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)14.1x

  ✗Dreman< 8x

  Price / Book Value per Share4.0x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-5.6%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=4.8%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=4.0x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share21.1x

  ✓Ackman<= 25

  Price vs. Trailing Low114% of trailing low ($4.60)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-1.66%; #3507/6340 (top 55.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2456; #3944/6449 (top 61.2%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share18.70x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-16.2%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.7231; #2163/5247 (top 41.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+8.55%; #930/4519 (top 20.6%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+9.13%; #1905/6202 (top 30.7%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth13% pass✓ 4✗ 9▾

  7 of 8 flag SNAP's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency0/11 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth10.6%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency4/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 54.1% -> 55.0%, operating margin -30.4% -> -9.0%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR18.8%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag SNAP's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio3.36

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)-16.5%

  ✗Buffett> 10%

  ROIC - WACC-26.5%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-4.3%

  ✗Greenblatt> 25%

  Current Ratio Change YoY3.95 -> 3.56

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.68x -> 0.77x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities3.36

  ✓Dreman> 1.5

  Return on Invested Capital-1.6%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-17.9%; FY2024: ROIC=-10.2%; FY2025: ROIC=-7.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -7.2%)

  ✗SleepROIC > 12% in a majority of years
• Cash Flow40% pass✓ 6✗ 6▾

  6 of 10 flag SNAP's cash flow — Buffett, Dreman, Pabrai +3 more

  Free Cash Flow Proxy$-460.5M

  ✗BuffettPositive and growing

  FCF Positive and Growing$776.6M

  ✓LynchPositive and growing

  Operating Cash Flow$656.2M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=8.55%, ROA=-6.00%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)14.1x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=4.8%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive5/11 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap8.4%

  ✓Ackman>= 4%

  Price / FCF per Share21.1x

  ✓Ackman<= 25

  Positive Operating Cash Flow frequency5/11 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$776.6M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+8.55%; #930/4519 (top 20.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models50% pass✓ 1✗ 1▾

  Models split on SNAP at $5.26 — fair values range $4.54–$6.45

  Munger fair value$4.54

  ✗Munger-15.9% margin vs $5.26

  Ackman fair value$6.45

  ✓Ackman+18.4% margin vs $5.26