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Snap Goes Splat: Sell-Side Reacts To Company's First Earnings Report

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Snap Goes Splat: Sell-Side Reacts To Company's First Earnings Report

Despite Snap Inc (NYSE: SNAP)'s poor earnings report and a 20 percent decline in shares of the social media company, not all among Wall Street are throwing in the towel. Here is a roundup of what some of Wall Street's most notable analysts are saying after the dust has settled.

The Bullish

Oppenheimer's Jason Helfstein issued a rare upgrade on Snap's stock from Perform to Outperform with a $23 price target. The analyst highlighted a long list of metrics that came in better than he had expected, including overall revenue, North American revenue, North American daily active users, North American average revenue per user, European revenue, European daily active user and average revenue per user all coming in better than he had expected.

Citi's Mark May maintains a Buy rating with a price target lowered from $27 to $24 under the assumption that investors are too focused on slowing daily active user growth at the expense of positive trends in advertising metrics.

JMP Securities' Ronald Josey maintains an Outperform rating and $28 price target after Snap's earnings report left him "encouraged." Specifically, the analyst likes the company's newer products, including Search, World Lenses, and greater Discover content. These are all driving engagement higher and there exists a "dislocation" in the stock.

Sitting On The Sidelines

Barclays' Ross Sandler maintains an Equal-Weight rating and $18 price target for a few reasons. Perhaps most notable, Snap's revenue came in better than he had expected and the seven million daily active user net-adds doesn't confirm the "Facebook is crushing Snapchat thesis."

Kip Paulson of Cantor Fitzgerald upgraded Snap's stock rating from Underperform to Neutral but with a price target lowered from $18 to $17. Part of the upgrade is related to one of the company's most visible strengths, namely its ability to better reach the highly desirable 18- to 34-year-old group. Also, the stock's valuation has now "improved" after the 20 percent decline in the stock.

JPMorgan's Doug Anmuth kept his Neutral rating on Snap unchanged but did lower his price target from $24 to $20. The unchanged rating could be attributed to the analyst's view that Snap is just two years into monetizing its platform and there are signs that various initiatives are and new products are creating excitement among users. But at the end of the day, the company's revenue in the first quarter was notably short of expectations and the upcoming end of the lock-up period could pressure shares.

Throwing In The Towel

Nomura's Anthony DiClemente initiated coverage of Snap with a Reduce rating and $16 price target. The analyst maintains his rating but lowered his price target by $2 as the company's earnings report showed a substantial deceleration in ad revenue and average revenue per user. While this factor by itself is concerning, adding to Snap's woes is that it is competing against "deeper-pocketed" rivals in the social media landscape.

Shares of Snap closed down 21.4 percent at $18.05.

Related Links:

First Quarterly Report From Snap Has No Crackle Or Pop

Jim Cramer Rips Into Evan Spiegel: 'He Needs To Be Hazed'

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Image Credit: By Maurizio Pesce from Milan, Italia - Snapchat, CC BY 2.0, via Wikimedia Commons

Latest Ratings for SNAP

DateFirmActionFromTo
Jun 2020Deutsche BankMaintainsBuy
May 2020CitigroupDowngradesNeutralSell
Apr 2020Morgan StanleyMaintainsEqual-Weight

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View the Latest Analyst Ratings

 

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