Market Overview

The Road Ahead For Snap: What Does It Mean To Be A Camera Company?

The Road Ahead For Snap: What Does It Mean To Be A Camera Company?

At $17 per share, Snap Inc’s (NYSE: SNAP) IPO implied a market cap of $23.6 billion. The company may be able to grow revenues by 100 percent to $800 million in 2017, while some buy side investors expect the figure to be closer to $1 billion, Loup Ventures’ Doug Clinton said in a report.

What It Means To Be A Camera Company

Snap is trying to gain a foothold of social networking from a unique angle -- the camera. The company’s flagship product, Snapchat, relies on smartphone cameras to enable its service. “We believe investors will have questions over the next year as to what being a “camera company” means,” Clinton wrote.

Snapchat needs connected cameras to be effective. By doing this, the company “evolves beyond a social media app into an enabler of communications,” Clinton noted. He added that Snap’s focus on the camera was similar to experiments being done by Facebook Inc (NASDAQ: FB) with Virtual Reality and Augmented Reality.

Related Link: Is Snapchat's Snap Another 'Junk' IPO?

Snap may launch multiple products. The company also has Lenses for enhancing current cameras.

“We expect the company to continue to develop software that utilizes the camera both in core Snapchat and perhaps outside of it as well,” Clinton commented.

Snap’s second camera product is Spectacles, which seems to be “the most useable AR glasses on the market today” and represent a step towards the next phase which would add more functionality, the analyst noted. He said the company may be experimenting with other hardware.

“We don’t know how the stock will react [today] or over the next year. What we do know is that the camera is at the centerpiece of communication already, and if Snap can find a way to own the camera they will be rewarded handsomely,” Clinton wrote.


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