Snap Inc (NYSE:SNAP) reportedly has plans to allow other companies to build lite versions of their mobile applications within its software.

Snap offers an attractive audience for mobile developers, and there is compelling engagement opportunity around gaming, according to BofA Securities.

The Snap Analyst

Justin Post maintained a Buy rating for Snap and raised the price target from $17 to $20.

The Snap Thesis

Snap also plans to let developers integrate its camera software and editing tools within their own apps, Post said in a Friday note. (See his track record here.)

The analyst expects the company to announce new software tools and platform policies at its Virtual Partner Summit scheduled for June 11. Snap is also likely to introduce some of its early partners at the summit, he said. 

"We also anticipate announcements on new video and gaming content at the Summit as Snap builds out content availability for its highly engaged audience."

Games offer a meaningful opportunity for Snap to increase engagement, given its younger audience and mobile first platform, Post said, adding that the company could generate fees similar to its peers of 20%-30% of in-game revenues.

The new price target reflects Snap’s faster revenue growth and bigger monetization opportunity, according to BofA. 

SNAP Price Action

Shares of Snap were trading 2.44% higher at $18.70 at the time of publication Friday.

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