What happened

Shares of Snap (SNAP 2.89%) cratered on Friday, falling as much as 32.1%. At 11:00 a.m. ET, the stock was still down 31.4%.

The catalyst that sent the social media company plummeting was disappointing results caused by a slump in its ad tech business.

So what

For the third quarter, the Snapchat parent reported revenue of $1.1 billion, up 6% year over year, while its net loss of $360 million plunged 400%. This resulted in a loss of share of $0.22, far worse than its loss of $0.05 in the prior-year quarter. This also marked the slowest quarterly sales growth in the company's history. 

To give these numbers context, analysts' consensus estimates were calling for revenue of $1.1 billion and a loss per share of $0.24. 

Management preferred to focus on the silver lining of its cloudy results, reporting that its daily active users (DAUs) of 363 million climbed 19% year over year. Unfortunately, average revenue per user (ARPU) of $3.11 declined 11%.

Snap also announced that its board of directors had authorized a buyback program, with plans to repurchase as much as $500 million of its stock over the coming 12 months.

CEO Evan Spiegel said the company's user growth "continues to expand our long-term opportunity as we navigate this volatile macroeconomic environment."

Now what

Further stoking investor fears, the company cited the "uncertainties related to the operating environment" in justifying its decision to forego providing financial guidance for the upcoming quarter. 

Following the results, analysts scrambled to adjust their models to address the deteriorating situation. As a result of the flood of outlook adjustments, three of Wall Street's finest issued downgrades, while more than a dozen slashed their price targets. 

MKM Partners analyst Rohit Kulkarni seemed to capture the prevailing concerns, calling the results "disappointing," while saying he overestimated Snap's resilience and ability to navigate the macro headwinds and Apple's (AAPL 0.52%) privacy changes, which have made it more difficult for apps to effectively target advertising. 

Given the economic uncertainty and the industry-specific difficulties the company has yet to circumnavigate, investors would do well to take a pass on Snap stock, at least until there is some evidence it can mount a turnaround.