Market Overview

Could Snapchat Be The First 'Social Augmented Reality Platform'?

Could Snapchat Be The First 'Social Augmented Reality Platform'?
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Snapchat has overtaken Twitter Inc (NYSE: TWTR) in terms of DAUs [daily active users] and is significantly impacting the social media landscape. “Importantly, we think that Snapchat is evolving beyond just "another social media platform" and could be headed to be the first "social augmented reality platform" (SARP),” SunTrust Robinson Humphrey’s Robert S. Peck said in a report.

Snapchat has the potential to expand social sharing beyond merely selfies; instead the entire world would be visible through augmented reality interactive lenses, analyst Robert Peck mentioned. Snapchat lens would enable everyday objects to become interactive.

Related Link: Instagram Now Boasts 500 Million Users

Takeaway For Investors

Peck stated the following takeaways for investors:

  • Investors should realize that Snapchat is already a large, is well capitalized and is evolving at a fast pace. This could be a threat to other social platforms in the long term.
  • As users engage more with this Snapchat, “original post sharing and user growth of other platforms could mediate over time.”
  • Other platforms could witness a slowdown in ad dollar growth, with engagement increasing on Snapchat.

Near Term Impact On Other Social Media Platforms

The analyst believes that the impact would be “de minimis” to Facebook Inc (NASDAQ: FB) and Instagram in the near term. He added, however, that Instagram should monitor the trend more closely, since it has recently witnessed a moderation in its user growth.

“For Twitter, we think the impact to users is less direct and the two platforms have very different use cases; however, incremental ad dollars could flow away from Twitter to Snapchat,” Peck wrote. He has Buy ratings for both Facebook and Twitter, with price targets of $135 and $18, respectively.

Latest Ratings for TWTR

Nov 2016OTR GlobalDowngradesMixedNegative
Oct 2016OppenheimerUpgradesUnderperformPerform
Oct 2016Goldman SachsMaintainsBuy

View More Analyst Ratings for TWTR
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