Benchmark Co. analyst Mark Zgutowicz has maintained their neutral stance on SNAP stock, giving a Hold rating today.
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Mark Zgutowicz has given his Hold rating due to a combination of factors impacting Snap’s financial performance and market position. The company’s second-quarter results showed a continued loss in market share, with advertising revenue growth slowing significantly. This decline in revenue growth, particularly in North America, is concerning as daily active users have also decreased for three consecutive quarters, indicating challenges in retaining market share.
Additionally, Snap’s new advertising products, such as Sponsored Snaps, have not yet contributed meaningfully to revenue, and there are structural issues with return on ad spend. The company’s infrastructure investments are not expected to yield the necessary returns, and increased headcount, especially in AI, is putting pressure on expenses. With competitive pressures from major players like Meta and Google, Snap’s future growth and monetization strategies remain uncertain, leading to the Hold rating.
In another report released today, Piper Sandler also maintained a Hold rating on the stock with a $9.00 price target.