Zinger Key Points
- BofA raises target to $14.5, while JPM and Wells Fargo lower targets.
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Snap Inc. SNAP shares are trading lower following fourth-quarter financial results reported on Tuesday and several analysts revised the price forecast.
Snap reported quarterly earnings of 16 cents per share, which beat the analyst consensus estimate of 14 cents. Quarterly revenue came in at $1.55 billion, which beat the analyst consensus estimate of $1.54 billion.
BofA Securities analyst Justin Post maintained the stock with a Neutral and raised the price forecast from $14 to $14.5.
The analyst remains cautious on first-quarter comps but raised revenue estimates due to stronger ad growth and Snapchat+ traction. Expense estimates, including SBC, increased for higher headcount and legal costs.
For 2025, Post raised revenue estimates by 3% to $6.1 billion, operating expenses by 1% and EBITDA by 13% to $789 million.
For 2026, the analyst raised revenue estimates by 5% to $7.0 billion, operating expenses by 4% and EBITDA by 7% to $1.081 billion.
The analyst now projects 11% YoY ad revenue growth over three years, with Snapchat+ helping drive total growth toward the sector average of 14%.
JP Morgan analyst Doug Anmuth maintained an Underweight rating and lowered the price forecast from $11 to $10.
The analyst remains encouraged by SNAP’s efforts to boost engagement, expand DR spending, grow its SMB advertiser base, and diversify revenue.
However, brand spending (~30% of ad revenue) remains under pressure in certain sectors, adds the analyst.
Anmuth writes he looks for better execution under new Chief Business Officer Ajit Mohan, increased contributions from ad initiatives, and improved profitability.
While the analyst raised 2025/2026 revenue estimates by ~1%, he trims adjusted EBITDA estimates by ~20% due to higher investments.
Apart from this, Wells Fargo analyst Ken Gawrelski downgraded Snap from Overweight to Equal-Weight and lowered the price forecast from $15 to $11.
Investors can gain exposure to the stock via Advisor Managed Portfolios Trenchless Fund ETF RVER and Global X Social Media ETF SOCL.
Price Action: SNAP shares are down 6.85% at $10.81 at the last check Wednesday.
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