Wall Street's reaction to the newly issued stock was overwhelmingly negative, so it may not surprise investors that Snap holds the title as being the most bearish company of any large U.S.-listed stock.
According to CNBC's "Trading Nation," the median price target among Wall Street analysts calls for a 43 percent downside. Rich Ross, Evercore ISI's head of technical analysis, explained that Snap faces an uphill battle, at least based on IPOs of Snap's social media peers.
Ross continued that Facebook Inc FB's IPO was similarly rejected by investors shortly after it started trading to the point where it lost half of its value in a few months — but it did rebound and gained over $100 per share over the years.
Ross also pointed out that Snap's IPO came at a time when the market was already trading near historical all-time highs so investors are taking a more cautious moving forward.
Snap Is Great At Raising Money
Eddy Elfenbein, the editor of the Crossing Wall Street blog, was also a guest on the "Trading Nations" segment and was quick to point out that Snap is a lot better at raising money than they are at making money.
"Not only will they be losing money this year and next year but most likely the year after that," Elfenbein said. "We are really not going to see a profitable company until at best many years down the road."
Related Link: Snap's Unproven Monetization Potential Doesn't Deserve To Trade At A Premium To Facebook
Related Link: Just A Reminder: Instagram's Daily Active User Growth Is Outpacing Snapchat's DAU Growth
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
