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Snap's Decline Post-Initial Earnings Print Offers A Compelling Entry; Oppenheimer Upgrades

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Snap's Decline Post-Initial Earnings Print Offers A Compelling Entry; Oppenheimer Upgrades
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Oppenheimer's Jason Helfstein feels Snap Inc (NYSE: SNAP)'s more than 20-percent decline in relation to its first ever earnings report as a public company marks a compelling entry point for investors.

Helfstein upgraded Snap's stock from Perform to Outperform with a newly established $23 price target as many aspects of the social media company's results came in better than he had expected:

  • Overall revenue was 7 percent better than expected.
  • North American revenue was 8 percent better than expected.
  • North American daily active users figure was 1 percent better than expected.
  • North American average revenue per user was 7 percent better than expected.
  • European revenue was 1 percent better than expected.
  • European DAU and ARPU were each 1 percent better than expected.

The analyst further noted that 12 of 26 brokerage firms who cover Snap had modeled the company's revenue to rise sequentially despite the regulatory S-1 filing cautioning of a seasonality in revenue.

What's Next For Snap

Looking forward, Helfstein believes Snap's search product could become "fundamentally transformative"; while adding a "real-time-update" vertical, which is "significantly more engaging" than Twitter Inc (NYSE: TWTR).

Also, a Snap-ad-manager release next month should bridge the gap between the company's on-demand geofilter product for micro-small-medium-size businesses/personal consumption and sophisticated API tools.

Bottom line, Snapchat's focus on "few-to-few communication" stands out in the social media landscape and acts as a "durable competitive differentiator" moving forward.

At time of publication, shares of Snap were down 20.84 percent at $18.19.

Related Links:

The Sell-Side Sentiment On Snap Ahead Of Its First-Ever Earnings Report

Snap's Earnings Report Reinforces Nomura's Bearish Initiation

Latest Ratings for SNAP

DateFirmActionFromTo
Dec 2017Evercore ISI GroupInitiates Coverage OnUnderperform
Dec 2017BarclaysUpgradesEqual-WeightOverweight
Nov 2017JMP SecuritiesDowngradesMarket OutperformMarket Perform

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings Long Ideas News Upgrades Price Target Analyst Ratings Movers Best of Benzinga

 

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