Market Overview

Deutsche Bank Analyst Sees Improvement At Snapchat

Share:
Deutsche Bank Analyst Sees Improvement At Snapchat

Investors continue to pay close attention to user metric trends at Snap Inc (NYSE: SNAP) in light of Europe's General Data Protection Regulation (GDPR) taking effect and a loss of users as of the first quarter.

The Analyst

Deutsche Bank's Lloyd Walmsley maintains a Hold rating on Snap with an unchanged $12 price target.

The Thesis

Snap's recent first-quarter report showed a loss of 2.8 million daily active users (DAUs) from the prior quarter, but tracking data compiled by Deutsche Bank shows a turnaround, Walmsley said in a research note. Specifically, the redesign of the Snapchat app resulted in a "robust" user growth of 3 percent across all geographic regions in May. At the very least, the findings removes "one tail risk" in the near term as it implies the social media app may have become relevant.

An upgrade to a bullish stance on Snap's stock can't be made at this time, the analyst said. The reasons include:

  • Even if growth continues throughout June, it doesn't guarantee any longer-term user growth opportunity and monetization;
  • Competition within the social media landscape remains "fierce"; and
  • Snap's stock valuation is "rich" at 10.4x 2019E sales and expectations for a 27 percent compounded annual growth rate through 2020.

Price Action

Shares of Snap were trading higher by 2.2 percent Wednesday afternoon at $13.20.

Related Links:

Cramer Trashes Snap, Compares Earnings Conference Call To 'SNL' Skit

Citron Takes Contrarian View, Champions Snapchat Stock

Latest Ratings for SNAP

DateFirmActionFromTo
Feb 2020MKM PartnersReiteratesNeutral
Feb 2020Atlantic EquitiesUpgradesUnderweightNeutral
Feb 2020RosenblattReiteratesBuy

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings

Posted-In: Citron Research DAU Deutsche Bank Lloyd WalmsleyAnalyst Color Short Sellers Analyst Ratings Tech Best of Benzinga

 

Related Articles (SNAP)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DXCMorgan StanleyReinstates38.0
CTSHMorgan StanleyReinstates59.0
CREEMorgan StanleyInitiates Coverage On62.0
BKNGMorgan StanleyMaintains2,050.0
ACNMorgan StanleyReinstates240.0
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.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
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 vipaccounts@benzinga.com