Snap Inc. (SNAP:NYE) Analyst are Bullish with a Strong Buy rating

STA Research
by: STA Research
Snap inc

SNAP Stock Forecast Analysis:

Based on the Snap stock forecast from 35 analysts, the average analyst target price for Snap stock price is USD 26.77 over the next 12 months. Snap Inc’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Snap Inc is Slightly Bearish, which is based on 4 positive signals and 6 negative signals. At the last closing, Snap stock price was USD 10.27Snap Inc’s stock price has changed by -6.72% over the past week, +3.95% over the past month and -85.95% over the last year.

About Snap Inc (SNAP:NYE)

Snap Inc. operates as a camera company in North America, Europe, and internationally. The company offers Snapchat, a camera application with various functionalities, such as Camera, Communication, Snap Map, Stories, and Spotlight that enable people to communicate visually through short videos and images. It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, story ads, collection ads, dynamic ads, and commercials. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California

 

Most Recent Analyst Ratings for SNAP stock:

Snap Stock Forecast News:

Snap is apparently planning to let go of twenty percent(20%) of the company’s workforce of more  than 6,400 employees.

The social messaging  giant’s cuts are set to take effect on  Wednesday,

Snap had 6,446 full-time employees at the end of June, which was up 38% year over year. In addition to the layoffs, the advertising department  will be restructured, but the layoffs will be mostly concentrated in the Teams department.

The company recently reported a poor second quarter earnings report, which is likely the catalyst behind the layoffs, as a result of the company’s $422 million loss which lagged analyst estimates.  The company stated that the current environment it was operating was very uncertain, and as a result, they were modest on estimates for the current quarter. The company stated of their revenue concerns, “demand growth on our advertising platform has slowed significantly”.

 

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Superior Revenue Growth

This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

 

What we don’t like:

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to book value

The stock is trading high compared to its peers median on a price to book value basis.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Negative free cash flow

The company had negative total free cash flow in the most recent four quarters for the current snap stock price.

Low Earnings Growth

Snap stock price has shown below median earnings growth in the previous 5 years compared to its sector

Disclaimer

Stock Target Advisor is not a broker/dealer, investment advisor, or platform for making stock buying or selling decisions. Our goal is to democratize and simplify financial information through automated analysis, aggregation of stock information, and education to help investors with their research. No content on our site, blogs or newsletters constitutes – or should be understood as constituting – a recommendation to enter into any securities transactions or to engage in any of the investment strategies presented in our site content. We also cannot guarantee the accuracy of any information presented on our site and in our analysis.

Leave a Reply

Your email address will not be published.