Snap (SNAP  ) shares were up 1% following the company's Q1 earnings report which showed a miss on the top and bottom line due to what the company described as a 'challenging' quarter. Weakness in tech is evident in multiple categories, and stocks are seeing big losses despite already being down so much.

Many tech stocks which saw huge gains in the months following the stock market bottom in March 2020 are now below these levels. Snap bottomed around $9 in March 2020 and then rallied to a high of $84 in September 2021. Currently, the stock is trading at $29.52. Even after this decline, it remains overvalued by conventional metrics with a $50 billion market cap and $4 billion in sales. Further, the company's growth is decelerating as evidenced in its earnings report.

Inside the Numbers

In Q1, Snap reported a loss of $0.02 per cents which was slightly worse than expectations of a profit of $0.01 per quarter. Revenue also just missed expectations at $1.06 billion vs $1.07 billion.

Overall, the company's growth is hitting a sharp slowdown as daily users grew only 18% and revenue was 38% higher.

In total, global daily active users came in at 332 million vs 330 million, and average revenue per user came in below expectations at $3.20 vs $3.25, a 17% increase.

The company attributed its earnings miss to macroeconomic conditions, which resulted in some advertisers pausing campaigns or spending less. It also noted a continued impact from Apple's (AAPL  ) privacy changes. Other issues cited were supply chain disruptions, inflation, and the impact of rising rates.

In the conference call, CEO and founder Evan Spiegel said, "In the days immediately following Russia's invasion of Ukraine on Feb. 24, we observed that a large number of advertisers initially paused their campaigns. The vast majority of clients resumed their campaigns within 10 days following the invasion, and daily average revenue in March exceeded pre-invasion levels."

Next quarter, it sees revenue rising between 20% and 25% which was below estimates of 28%. Its forecast for user growth came in slightly above expectations. However, it sees continued challenges in terms of ad spending as these issues continue to linger.