Cautious Outlook on Snap: Hold Rating Amidst Revenue Challenges and Market Pressures

In a report released today, Justin Post from Bank of America Securities reiterated a Hold rating on Snap, with a price target of $9.50.

Justin Post’s rating is based on Snap’s recent financial performance and market position. The company’s second-quarter revenue and EBITDA figures fell short of expectations, with a decline in U.S. user numbers and technical issues affecting advertising revenue. Despite some growth in Snapchat+ revenue, Snap’s overall ad revenue growth was slower compared to its peers, which have shown stronger results.
Additionally, Snap’s third-quarter revenue guidance, although slightly above expectations, remains underwhelming in the context of the broader industry’s performance. The company’s challenges with user saturation in key markets and pressure on user engagement further contribute to a cautious outlook. With ongoing concerns about profitability and high stock-based compensation, Justin Post maintains a Hold rating, reflecting a neutral stance on Snap’s growth and profitability prospects.

In another report released today, Piper Sandler also maintained a Hold rating on the stock with a $9.00 price target.

Based on the recent corporate insider activity of 96 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SNAP in relation to earlier this year.