Instagram Crosses 500 Million Users, But Data Suggests U.S. Growth Slowing

SunTrust analysts found Instagram’s recently released user numbers impressive, but wondered whether slowing user growth indicates that the U.S. market has already matured.

Instagram is still seeing 300 million daily active users, about 60 percent of a total of 500 million monthly active users. This is close to catching up to Facebook Inc FB at 66 percent. Most, if not all, of the monthly active user growth came from international markets.

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While the analysts see no near-term risk to either Instagram or its owner, Facebook, they highlight the slowing pace of user growth to help investors understand the long-term potential for both platforms. In addition, while Instagram user numbers are beginning to eclipse Twitter Inc TWTR, the app is seeing new competition from apps like Snapchat.