Shares of Snapchat parent Snap (SNAP) plunged Wednesday after disappointing fourth-quarter results fell short of elevated hopes, but Jefferies Vice President James Heaney remains bullish. While the "quarter was definitely a lot worse than what people were expecting," Heaney tells Yahoo Finance Live he "still likes the stock" and sees recovery potential.

Heaney notes Snap's revenue miss and slowed user expansion "justified" the slide, given the stock "nearly doubled" last quarter. With expectations for 10% revenue growth, Snap's 5% year-over-year result shocked investors.

However, Heaney believes Snap's ad investments and forthcoming app changes can reignite growth. By tracking "advertiser traction" and boosting engagement through tab consolidation, Heaney says Snap will get "more attractive to users."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

SEANA SMITH: Well, Snap shares plunging in pre-market trading after missing on revenue, reporting slower user growth. The top trending ticker on Yahoo Finance. Look at that move down, about 31% ahead of the open. Now the company continuing to struggle to turn around its ad business, a totally different report than what we got compared to one of its rivals out there, Meta's. Let's talk about the reaction that we're seeing play out in the stock right now. And what it looks like for the company going forward.

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We have James Heaney, he's Jefferies Vice President of Equity Research. James, it's good to have you here. So disappointing report clearly here from Snap. You're seeing that reflected in the move to the downside ahead of the open. A loss that we're seeing here-- is that justified?

JAMES HEANEY: Look, I mean the quarter was definitely a lot worse than what people were expecting. I mean, 5% year on year revenue growth was more or less in line with the 2% to 6% internal forecast that they provided, but it was well below the buy side bogey of roughly 10% year on year growth that people were looking for.

And look, this was a super crowded, long end of the print. I mean, if you look at the stock action-- and the stock had almost doubled since the last print. So it really needed to be perfect. And it was far from that. So I think there's a justified move down, but we still like the stock and think it can recover on the acceleration that we're expecting into Q1. So, happy to dive in more, but yeah, gut reaction-- the move makes sense. But we still think there's a buying opportunity here.