6 Reasons For A Positive View On Snap

“Snap Inc SNAP products are differentiated, the audience is highly engaged and the company’s Delete by Default approach is “increasingly attracting a wider audience,” JMP Securities’ Ronald V. Josey said in a report. He initiated coverage of the company with a Market Outperform rating and a price target of $28.

6 Positives

Josey mentioned the following positives for Snap:

1. Audience: At scale, engaged and growing.
2. Product innovation: Differentiated products like Lenses, Geofilters and Spectacles.
3. Ad Products: Attracting incremental demand.
4. Ad API: Is expanding Snap’s reach.
5. Spectacles optionality: Snap is, at its core, a camera company.
6. Margin expansion.

“While we acknowledge it remains early in Snap’s evolution with risks around DAU [daily average users] growth, competition, and profitability as shares have limited (at best) shareholder rights, we believe DAU growth is recovering, advertisers are actively adopting the platform, and Snap’s use of the Cloud provides increased flexibility,” the analyst wrote.

Josey mentioned that Snap was among the most innovative companies, while adding that its at scale and engaged audience could attract meaningful incremental advertising demand.

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