Snap investors eagerly await post-close business reports. Some analysts fear the social networking app’s peak growth is over. According to FactSet, Snap (SNAP) analysts expect to lose 24 cents per share on $1.11 billion in revenue and 405.8 million daily active users in the third quarter. Analysts expect a 16-cent loss per share on $1.34 billion in revenue and 414.5 million DAU in the fourth quarter.
Snap Stock: Market Perform Rating and $11 Price Target
Bernstein analyst Mark Shmulik maintained his Market Perform rating and $11 price target for Snap stock on Monday. Most of Snap’s ad technology development “has been offset by spend decline from top advertisers,” he said. Time spent on the app looks to be challenged domestically.”
Snap stock rose 3% to $9.73 Monday afternoon. According to the analyst, Apptopia data shows Snap app downloads fell 3% year over year in September. Fewer downloads could hurt corporate growth and engagement.
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In addition, Snap shares rose last week after the Verge reported CEO Evan Spiegel’s internal message on next year’s stretch objectives. However, the company’s shares are down 24% in three months. Snapchat (SNAP) reached 5 million paid subscribers in late September.
Seeking Alpha analyst Stone Fox Capital says, “Snapchat+ offers an opportunity for the company to establish a recurring revenue stream and break away from the competitive advertising market.” Snap’s infrastructure investment spending to enable content relevancy, ad targeting, and AI will also affect earnings.
Conclusion:
Snap will lose revenue and daily active users per share in Q3 and Q4. Top advertisers have cut spending, offsetting Snap’s ad technology development. Snap shares soared last week after CEO Evan Spiegel’s internal communication on next year’s stretch goals. The company’s shares fell 24% in three months.
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