Data Backs Up Concerns The Snapchat Update Is Alienating Users, Stifel Says
Stifel's John Egbert maintains a Hold rating on Snap's stock with an unchanged $17 price target.
Data compiled by Egbert found that Snap's total U.S. estimated audience reach fell 0.1 percent in the January to February period. Audience at the same time across key international ad markets like UK and Canada was down 1.1 percent. The data suggests the social media company experienced a "minor disruption" from the app udate, which drew a "much-publicized backlash from a number of vocal users."
Third-party data from Sensor Tower did find a rise in first-time app downloads through Feb. 12, which could be a result of the increased media attention, the analyst said. But the decline in usage from January and February implies ongoing disruption to Snap's engagement as a whole through the end of February.
While the disruption is "relatively minor" in comparison to the media coverage, it may end up impacting daily active user figures, Egbert said. Investors should pay attention to March trends and whether they show an improvement, allowing the company to hit its DAU estimate of 2.5 million net adds in the first quarter.
Snap shares were down 2.31 percent at $16.92 in Thursday morning trading.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.