Snap Inc’s SNAP fourth-quarter revenue beat and healthy guidance for the first quarter has increased the confidence in the iOS 14.5 IDFA workaround solutions gaining traction, according to BofA Securities.
The Snap Analyst: Justin Post upgraded Snap from Neutral to Buy with an unchanged $55 price target.
The Snap Thesis: Acceleration in user growth in the sector and stabilizing data on time spent suggest a “manageable impact from TikTok,” Post said in the upgrade note.
“We see multiple product catalysts that could drive ARPU expansion (Spotlight/Maps monetization, measurement tools) and accelerate growth to 50%+ exiting 2022,” the analyst wrote.
Following the more than 20% decline in Snap’s share price on Thursday versus the 4% downturn of the NASDAQ 100, the stock now trades at a “material discount to a 5yr historical P/S avg. of 11x… when the company was growing at/above 50%,” he added.
SNAP Price Action: Shares of Snap were trading 46.08% higher at $35.79 Friday morning.
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