Skip to main content

Market Overview

A Snap Bull Points Out A Silver Lining In An Otherwise Messy Q3

A Snap Bull Points Out A Silver Lining In An Otherwise Messy Q3

By many measures, Snap Inc (NYSE: SNAP)'s third-quarter earnings fell well short of what analysts were expecting.

Wall Street was expecting the company to report revenue of $207.9 million, indicate it has 181.8 million people who use the platform daily (DAU) and an average revenue per user (ARPU) of $1.30. Instead, the company reported revenue of $207.9 million, 178 million daily active users and an ARPU of $1.17.

The Analyst

Credit Suisse's Stephen Ju.

The Rating

Ju maintains an Outperform rating on Snap's stock with a price target slashed from $20 to $17.

The Thesis

The social media company's earnings was very much "messy" but there is one "silver lining" that reinforces a bullish stance, Ju said in a report. Specifically, programmatic sales of Snap Ad impressions account for 80 percent of total impressions, which marks an improvement from zero percent in the third quarter of 2016 and 60 percent in the second quarter of 2017.

It's only a matter of time before programmatic sales accounts for nearly 100 percent and the revenue through auction surpasses 50 percent, the analyst said. At that point Snap's ad pricing headwind will become a tailwind as it adds advertisers to the platform.

"Hence we do not view our investment thesis as being impaired but rather moving at a slower pace than we had hoped," Ju wrote.

Price Action

Shares of Snap were trading lower by more than 13 percent Wednesday at $13.14, but are still above its all-time lows of $11.28.

Related Link:

Snap Spectacles Write-Down Presents Existential Questions

Latest Ratings for SNAP

Feb 2021Truist SecuritiesMaintainsBuy
Feb 2021UBSMaintainsBuy
Feb 2021Canaccord GenuityMaintainsHold

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings


Related Articles (SNAP)

View Comments and Join the Discussion!

Posted-In: Credit Suisse DAU Snap DAU Stephen JuAnalyst Color Price Target Analyst Ratings Best of Benzinga

Latest Ratings

NIUDaiwa CapitalInitiates Coverage On41.5
QMCONorthland Capital MarketsInitiates Coverage On12.0
IBKRJefferiesInitiates Coverage On89.0
MRETFTD SecuritiesDowngrades18.5
SWKSGoldman SachsDowngrades135.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
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