Snap (SNAP  ) shares closed 59% higher following its much better than expected Q4 earnings report in which the company achieved its first quarterly profit in history. The earnings result comes a day after the stock was down 25% on concerns that ad revenues were weakening following Facebook's (FB  ) poor results.

Overall, Snap is still down 17% YTD and 39% over the past year. The stock peaked in September 2021 around $84 and recently bottomed around $28. Snap's snapback rally wasn't surprising given that shares reached extreme, oversold levels, and the company beat expectations across nearly every metric.

Inside the Numbers

In Q4, Snap reported earnings per share of $0.22 cents, beating expectations of $0.10 per share. Last year, the company lost $0.08 per share. Revenue came in above expectations at $1.3 billion vs $1.2 billion expected and was 45% higher compared to last year.

Global daily active daily users came in at 319 million which was higher than the 316.9 million expected by analysts. Average revenue per user also beat at $4.06 vs $3.79. Snap's guidance for Q1 revenue also came in slightly above expectations at $1.03 billion to $1.08 billion, which was above the $1.01 billion estimated by analysts. It forecasts daily active users between 328 million and 330 million which was also above analyst's estimates of 327.8 million.

Snap did experience some impact from Apple's (AAPL  ) privacy changes in the new iOS which makes ad-targeting more difficult. Facebook took a $10 billion revenue hit. Snap is also feeling the affects but seeing this offset by growth in its direct response advertising business.

However, the company believes its in good position to handle these changes as it always centered privacy in its products. The company said it's finding success with helping companies transition up the funnel and move away from in-app purchases to installs and clicks where there is more visibility.

With the decline in its stock price, Snap's valuation has become considerably more attractive especially as its recent earnings report shows that the company's momentum remains strong. Next year, it should cross $5 billion in revenue. Despite, the stock losing nearly half of its value, it remains quite expensive with a market cap close to $60 billion even after its multiples have improved.