Analyst: Snap Should Be Worried About Facebook's New Features

Facebook Inc FB's newly introduced features that mimic Snap Inc SNAP's platform should have Snapchat's management team nervous, at least according to Cantor Fitzgerald's Youssef Squali.

Speaking as a guest on CNBC, Squali noted Facebook previously copied Snap's "Stories" feature in its Instagram platform, which managed to slow down Snapchat's user growth and engagement.

"I think it will be interesting to see what happens over the next couple of quarters," Squali said. "But clearly if you are Snap, you are worried. It's easy to copy a lot of these functions."

Can Snap Manage The Storm?

Squali pointed out that Snapchat's platform dominates the key demographic age group of 13 to 24, but for Snap's stock to move higher over time the company needs to expand beyond that one particular age segment.

Squali said it remains to be seen how creative Snap will get to expand beyond the teen and millennial age group. But for the time being, the company has indeed demonstrated an ability to be creative and to monetize the platform. This is the problem facing Snap moving forward as the stock's movement will be dictated more on user growth and engagement and less on monetization activities.

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