Key Takeaways
- Snap shares fell 2% today as jury selection began in its first trial over youth social media addiction.
- Meta is a co-defendant, but the case carries far more weight for Snap, a company worth about $10 billion.
- Snap’s free cash flow was $437 million in 2025, and Meta’s was $46.1 billion.
- Snap reports third-quarter results on Nov. 4, against guidance of $1.70-$1.74 billion of revenue.
Snap (SNAP) shares are down 2% today as jury selection began in Los Angeles. Two teenagers say social media hooked them and damaged their mental health. Meta Platforms (META) is also a defendant, but this is the first time Snap has faced a jury in one of these cases.
“This will be the first case against Snapchat and the first time the public has a chance to see some of their documents,” Mark Lanier, founder of The Lanier Law Firm and lead counsel for the plaintiffs, told CBS News in an email.
TIKR tracks 42 analysts on Snap. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Snap, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Snap’s Analyst Ratings
A much bigger deal for Snap
The plaintiffs want compensatory and punitive damages but haven’t named an amount. Snap says the claims “fundamentally misrepresent the plaintiffs’ experiences on Snapchat and how our platform was designed.”
But the gap between the two defendants is easy to see. Snap’s free cash flow has run in the hundreds of millions of dollars a year:
The trend is improving: free cash flow reached $705.5 million over the twelve months to June 2026. But Snap ended 2025 with $4.14 billion of debt against $2.94 billion of cash and short-term investments, so it has little cushion.
In August, Meta agreed with 52 state attorneys general to settle teen mental health litigation for up to $18.59 billion, taking a $9.89 billion charge in the third quarter. It still ended September with $82.45 billion of cash and marketable securities. Its free cash flow usually runs in the tens of billions:
(That cushion is thinner right now: heavy AI spending pushed Meta’s third-quarter free cash flow to negative $2.12 billion.)
Meta also says it has “a number of youth-related trials scheduled in the coming months in the U.S.” So today’s trial is a cost Meta is already planning around, and its stock is down just [2%].
Earnings come first
Snap reports third-quarter results on Nov. 4. Management has guided to $1.70-$1.74 billion of revenue and $300-$350 million of adjusted EBITDA. The report will show whether the margin turnaround is still on track.
CEO Evan Spiegel has said ad revenue from users under 18 isn’t material. So I think the bigger risk is court-ordered product changes that cut engagement for every user.
My take: today’s drop is a fair reaction. One verdict would put a price on thousands of similar suits, and Snap has much less room than Meta to pay it.
Of course, Snap could still settle before a verdict.
So what is Snap stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Snap could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
