After Snap's Dismal Q2, This Analyst Gives Take On Meta, Airbnb

  • Following Snap Inc's SNAP (reiterated Sector Perform; Price Target: $10) Q2 resultsRBC analyst Brad Erickson questioned the notion that Meta Platforms Inc META (reiterated Outperform; Price Target: $240) may see offsetting strength from spending returning to its platform either as a function of better conversion versus other channels or IDFA reversion. 
  • His checks essentially did not detect that spending was being optimized so much as reduced or eliminated.
  • Also Read: How One Analyst Expects Alphabet, Meta, Snap, Amazon To Perform In Upcoming Earnings Season
  • Given valuations in the space, he heard very few explore the prospect of a more structural shift in ad spend weighing on the industry simply as growth-oriented companies have to make money. 
  • Not coincidentally, smartphone maturity did not happen until around 2012-2014, a full 2-4 years after the GFC, where unprecedentedly low-cost capital enabled the digital ad industry to flourish. 
  • Airbnb, Inc ABNB (reiterated Sector Perform; Price Target: $175) raising its maximum penalty for hosts canceling last-minute from $100 to $1000 seemed harsh to Erickson, mainly when the bull case relied on better supply expansion. 
  • Price Action: META shares traded lower by 1.57% at $166.62 on the last check Monday.
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