Market Overview

That Didn't Take Long: Snap Initiated With A Sell Rating At Pivotal

Share:
That Didn't Take Long: Snap Initiated With A Sell Rating At Pivotal

Snap Inc's (NYSE: SNAP) initial public offering is a few hours old, but Wall Street firms that didn't participate in the underwriting activity are coming out with their recommendations.

Pivotal Research Group's Brian Wieser initiated coverage of Snap with a Sell rating and $10 price target, notably below the $17 per share offering price and well below the $25 per share Snap was trading at early Thursday afternoon.

Speaking to CNBC, Wieser said the valuation on Snap's stock is "more than robust" especially given his revenue estimate of just $7 billion by 2023. The analyst suggested Thursday's strong performance is in part due to IPO euphoria and the thinking that "the next person will pay more for it."

See Also: Snap Already More Valuable Than Twitter, Macy's, Other Household Names

Wieser also attributed his bearish rating to the fact that Snap issues a large amount of shares. For example, the average Snap employee received last year $1.4 million worth of shares last year which is "stunning."

Wieser also argued Snap's corporate structure is "sub-optimal" and led by a management team that lacks the necessary experience in transforming a new product into a successful company.

"It's not to say that they can't be successful," Wieser explained. "But they haven't done it yet so there is some real risk. I could generate one billion dollars in revenue if you gave me $2 billion today. That wouldn't make me successful."

Latest Ratings for SNAP

DateFirmActionFromTo
Sep 2019UpgradesNegativeNeutral
Sep 2019UpgradesIn-LineOutperform
Jul 2019MaintainsNeutral

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings

Posted-In: Brian Wieser CNBC Pivotal Research GroupAnalyst Color Price Target Initiation Analyst Ratings Media Best of Benzinga

 

Related Articles (SNAP)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ARMKBarclaysMaintains45.0
HDDZ BankDowngrades
COGWolfe ResearchUpgrades
MLHRSidoti & Co.Maintains45.0
ICFISidoti & Co.Maintains99.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Betterment Pushes Personal Finance Into Age Of Automation

Mid-Afternoon Market Update: Crude Oil Down 2%; Ameresco Shares Spike Higher