Skip to main content

Market Overview

Snap's Q4 Points To 'Material Multiyear Growth' Ahead, BofA Says In Upgrade

Snap's Q4 Points To 'Material Multiyear Growth' Ahead, BofA Says In Upgrade

Snap Inc (NYSE: SNAP) reported after Tuesday's market close its first-ever better-than-expected quarterly earnings report since becoming a public company nearly one year ago, which turned at least one Wall Street analyst bullish on the social media company's outlook.

The Analyst

Bank of America Merrill Lynch's Justin Post upgraded Snap's stock rating from Neutral to Buy with a price target boosted from $16 to $24.

The Thesis

Snap's fourth-quarter report consisted not only consisted of a top- and bottom-line beat, but total users of 187 million exceeded the Street's expectation of 184 million and monetization ramped "much better" than expected, Post said in the upgrade note. Snap's programmatic platform and stronger advertiser adoption helped the company "turn the corner" on monetization, and the company now faces "material multiyear growth," Post said, projecting five-fold growth from the current revenue per daily active users figure of $2.75.

Snap's earnings report included encouraging progress on the Creative Tool transition to programmatic, as scaling advertising around Snap usage — as opposed to Stories — was previously a big investor concern, the analyst said. 

Snap has multiple "potential engagement drivers" ahead, Post said:

  • The Winter Olympics.
  • The rollout of the app redesign.
  • A rebuild of the Android app.
  • Traction for newer features like Stories Everywhere.

Investors could view the encouraging earnings report as being "somewhat of an inflection," and could expect multiple positive upcoming events in the first quarter, according to BofA. 

Price Action

Shares of Snap were trading higher by more than 20 percent ahead of Wednesday's market open.

Related Links:

Snap Under Fire In The Headlines; Investors Shrug

The Snap Bear Filter: Wedbush Projects Below-Consensus Q4

Latest Ratings for SNAP

Apr 2021WedbushUpgradesNeutralOutperform
Apr 2021Atlantic EquitiesUpgradesNeutralOverweight
Apr 2021Wolfe ResearchInitiates Coverage OnOutperform

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings


Related Articles (SNAP)

View Comments and Join the Discussion!

Posted-In: Bank of America DAU Justin Post SnapChat Snapchat Monetization Snapchat StoriesAnalyst Color Analyst Ratings Best of Benzinga

Latest Ratings

JBHTRaymond JamesMaintains180.0
CAKETelsey Advisory GroupMaintains62.0
FWRDRaymond JamesMaintains100.0
WFCMorgan StanleyMaintains49.0
BBBYTelsey Advisory GroupMaintains30.0
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