Snap Q2 2017 earnings are set for release on Thursday, and Wall Street is looking for non-GAAP losses of 14 cents per share on $189.5 million in revenue. That compares to the $71.8 million in revenue the company reported in last year’s second quarter. Analysts are also projecting 30 cents per share in GAAP losses.

Snap’s stock remains volatile after the lockup on millions of shares of insider-owned stock expired. The shares tumbled on Tuesday, only to bottom out and start rising on Wednesday. Still, Snap has lost about half its value since its IPO earlier this year.

snap q2 2017 earnings

Doomsday narrative for Snap Q2 2017 earnings

Drexel Hamilton analyst Brian White remains firmly in the bull camp as Snap Q2 2017 earnings approach. He notes that the company’s stock has been tumbling due to a combination of the recent lockup expiration and what he calls “a never ending, doomsday narrative around Facebook’s perceived impact on Snapchat.” He believes Snap shares are “in a bottoming process” and sees “strong upside potential” for the next 12 months.

White expects global average revenue per user to come in at 89 cents, a 77% increase from the 50 cents the Snapchat parent reported in the year-ago quarter. He’s projecting 174 million daily active users, a 21% increase from the 143 million reported last year. However, he sees user metrics as less relevant than it is for Facebook and other social media firms.

He likes the company’s innovations and new original shows, such as the Snapchat news show Stay Tuned. For the third quarter, consensus estimates stand at losses of 13 cents per share on $276.7 million in revenue.

Cautious on Snap

Although White sees user metrics as less important for Snap than for other social media firms, Canaccord Genuity analyst Michael Graham wants to see evidence of user growth before he will upgrade it from Hold. He has a $22 price target on Snap stock.

In a note on Monday, Graham described Snap as “slowly turning from an experimental buy to a must-buy for advertisers seeking a large, young, and engaged audience.” He noted that the company’s daily user base and revenue are growing but off small bases compared to other digital ad firms such as Facebook or Google.

He’s cautious on Snap in the long term despite the positives that exist within the rapidly growing digital ad industry. He expects user growth to remain “at fairly low rates” because of competition, particularly with Facebook’s Instagram. And as Snapchat expands internationally, he expects things to become even more difficult.

Looking at user growth in Snap Q2 2017 earnings

His biggest concern for Snap Q2 2017 earnings is user growth, which decelerated in the first quarter. After reporting its first-quarter results, its stock plunged by more than 20%, and Graham blames much of this drop on the deceleration in daily user growth. Snap said its daily active user base grew 36% in the first quarter, following the 48% increase in the fourth quarter and the 63% growth in the quarter before that. He’s projecting another deceleration for the second quarter at 21%. Consensus is looking for a 23% increase.

The day before Snap Q2 2017 earnings are set for release, the company’s stock is climbing by more than 3%, reaching as high as $13.65 during regular trading hours.