Should you buy Snap Inc stock ahead of Q2 earnings? Jim Cramer thinks so

Snap Inc (NYSE: SNAP) reports its quarterly financial results later this week, on July 22^nd. Ahead of the earnings report, investors are wondering if the stock is a buy?

Mad Money host Jim Cramer seems to think so. On CNBC’s “Squawk on the Street”, he noted that the $94 billion social media company expects to report a massive 84% annualised growth in revenue as he rated the stock at ‘buy’.

Snap’s Spotlight is growing rapidly

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Cramer was particularly confident of ‘Spotlight’, which now has over 125 million users and is available in 14 countries, as a major driver of growth for Snap.

People keep looking at it. It’s like TikTok. You can’t get TikTok, buy some Snap, he said.

In the prior quarter (Q1), Snap reported the fastest growth in revenue and added record users in three years. The Santa Monica-based company is likely to deliver the same this quarter as well.

Snap is up about 2% in the stock market on Tuesday. On a year-to-date basis, the stock is now up more than 20%.

Snap Inc earnings preview

Wall Street is calling for year-over-year growth in DAUs to remain sequentially unchanged at about 22% in the second quarter. The forecast translates to 290.6 million daily active users for Snap at the end of June.

While the growth is expected to be more conservative in North America and Europe at 5% and 11%, respectively, analysts predict the rest of the world to see a much broader 52% increase in DAU’s this quarter.

Considering that Snap has so far been a laggard in terms of international growth compared to rivals, the aforementioned numbers are likely to woo the investors. Snap also expects to further contract its adjusted EBITDA in Q2 to $20 million loss tops.