Snap undershot forecasts on user growth and revenues in its first results as a publicly listed company.
The owner of disappearing message app Snapchat reported revenue growth of 286 per cent, totaling $149.6m (£115.6m) in the first quarter.
However, analysts had expected faster growth both in user numbers and in revenue per user.
The firm reported 36 per cent year-on-year growth in daily active users to reach 166m in the first quarter of 2017, below analyst forecasts of 167m users.
Meanwhile, average revenue per user reached 90 cents. That represented an increase of 181 per cent year-on-year, but a 14 per cent decline from the previous quarter.
Stocks plummeted by as much as 25 per cent in after-hours trading, with prices falling below $17.5 per share late last night.
Snapchat shares jumped 44 per cent when it listed in March in the biggest tech float since Facebook. However, since then shares have fallen 5.5 per cent from that day's closing price.
Rob Kniaz, a partner at venture capital firm Hoxton Ventures, said: “For a company valued exclusively on growth, it’s pretty disastrous.”
He added: “It’s a one-trick pony and that pony is starting to wear out.”
However, other analysts were less pessimistic, noting the potential for future growth despite the missed targets.
Suranga Chandratillake, general partner of Balderton Capital, said: "Even though Snap missed on its first call, I think it's too early to give the doom merchants centre stage.
“The long-term trend is clear: Snap has demonstrated that brand advertising can work online and, as such, is the first real, existential threat to the huge television advertising market, especially when you consider how little traditional TV younger people are watching, and how much time they are spending on platforms like Snap.”