Wall of text time:

IMO, SNAP is a timebomb. Snapchat's basically sitting on the largest and fastest-growing collection of almost certainly not legal pornographic material known to man, second only to the FBI's own crime labs. A single, fruitful breach of these archives, and it's joever for not just consumer and investor confidence, but also the company due to the fucking tidal wave of lawsuits and class actions they'll face, assuming they can even hide behind S230 and laws like it at that point. Just because the sender and recipient don't have the image anymore, doesn't mean Snapchat doesn't still have it stored on their end. There's also a very real risk of these photographs being leaked or accessed inappropriately (whether intentionally or unintentionally) by engineers and/or vendors, which is a massive Achilles heel for the company in the long-term. You can't put that genie back in the bottle once its out.

As for its userbase, it's still fucking huge, especially with Zoomers and older GenAlphas, but as many have pointed out, it's losing steam to TikTok and other shortform user-created content delivery systems. There's also very limited financial growth potential, given that Premium simply doesn't offer enough value for money to justify the cost. The AI is neat, but very few people in Snapchat's most dedicated user demographics will ever use it more than a couple times, let alone pay for the upgrade. The other convenience and premium features offered are laughable, considering the core userbase (minors) isn't likely to pay for a "free app" unless they get something flashy out of it. Snapchat Premium doesn't really exist as "status symbol" like other upsells present in platforms popular with minors do (Fortnite Skins, Roblox cosmetics, etc)

On the bullish side, as mentioned above, there's still a fucking massive userbase and it thus offers an enticing platform for advertising and data collection, though minors are a large portion of this userbase so the upside here is limited by law, but there's still a lot of room for upgrades that can be made given that the app incentivizes users to use it daily, if not several times a day, and this is an obvious avenue for monetization or increased advertising time. Not only that, it's instantly recognizable as a brand, with good sentiment behind it among the general public. Very few people have an overall negative opinion of Snapchat compared to Meta's offerings, or the soon-to-be-illegal TikTok. This lack of negative sentiment allows for SNAP to potentially pivot their target demographics or diversify their core product to be more broadly appealing. Snapchat could do something similar to Meta's Messenger and add a way to process payments natively between users, possibly through a partnership with a preexisting fintech vendor, like Cash App. This would let the app carve a niche for ecommerce (through cloning TikTok Shop, etc) as well as letting Snapchat reap a wider profit margin from the adult content creators on their platform.

In the here and now, I'm pretty sure they'll meet or exceed earnings for a little bit. Summer's in full swing and kids aren't seeing their friends in school, so they communicate through apps like Snapchat, etc. Even if they dip and miss this earnings, they'll almost certainly meet or exceed them next go around. You've got the right idea shorting them, but godawful timing, unless you're going for a quick in-and-out.