Snap Inc SNAP shares continue to move higher Thursday. The stock surged Wednesday afternoon after an internal memo containing lofty revenue and user growth targets was leaked.
What Happened: Snap CEO Evan Spiegel told employees that the company aims to grow Snapchat’s user base by 30% to 450 million by the end of next year, according to an internal memo obtained by The Verge. Snap also aims to increase revenue 20% year-over-year to $6 billion in 2023.
Approximately $350 million of said revenue is expected to come from the recently announced paid subscriptions that allow users to access additional features. It's currently on track to hit 4 million subscribers by the end of the year.
"We saw challenges on the horizon, and hedged our bets accordingly, but still got punched in the face hard by 2022’s new economic reality ... We have decisively entered a new era, and we must adapt and overcome to succeed in this new reality," Spiegel wrote in a memo to employees.
Why It Matters: According to several reports, analysts from UBS and KeyBanc weighed in with positive commentary following the news. A BofA analyst even reiterated the stock with a Buy rating on Thursday, citing easier comps and a potential upside surprise from Snap's paid subscriptions.
"More favorable macro conditions may be necessary to achieve these targets, but with August revenue growth at 12-15% estimated, Snapchat Plus is likely seeing better-than-expected traction, and easier revenue growth comps ahead, a material macro improvement may not be necessary to achieve Snap's goals," the BofA analyst said.
See Also: Looking At Snap's Recent Whale Trades
SNAP Price Action: Snap has a 52-week high of $47.71 and a 52-week low of $9.34.
The stock was up 8.38% at $12.42 on Thursday afternoon.
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