Snap Extends 2019 Surge With Analysts More Confident in Rebound





(Bloomberg) -- Snap Inc. shares jumped on Tuesday, extending a multi-month surge that has seen the stock nearly triple in value as analysts grow more confident that the social-media company is in the middle of a turnaround.

The stock jumped as much as 9% and was trading at its highest level since April 2018. Shares have gained more than 190% off a December low.

Tuesday's rally was fueled by BTIG raising its price target by $5 to $20. The move was just the latest reflection of the firm's growing confidence in the company, which is known for its Snapchat social-media app. BTIG upgraded Snap to neutral in December, and then to buy in March, and now its target is the highest on the Street.

There are "far too many investors" ignoring the company's recovery, analyst Richard Greenfield wrote, adding that his own conviction "has meaningfully increased" since March. He listed eight catalysts that could extend the rally, including a "more open approach to third-parties" and higher daily active users, and lamented that consensus expectations for user growth and revenues/Ebitda "are simply too low."

Snap's 2019 rally picked up steam in early February, when its fourth-quarter results beat expectations and it pointed to a stabilizing user base. An additional leg up followed in April, when it announced a suite of new products and services, including a video-game business.

One of the most significant catalysts came after Chief Executive Officer Evan Spiegel said a highly anticipated Android redesign would be fully rolled out by the end of the year, news that helped assuage concerns over user engagement.

"With the Android rebuild stunting user growth for much of 2018, the launch of the updated app is supporting a resurgence in Android users," Jefferies analyst Brent Thill wrote on Tuesday, citing an analysis of Android data for April and May. "Positive user growth in 1Q has continued into 2Q and time spent on the platform is relatively stable."

Jefferies has a hold rating on the stock, writing that "improvements may already be priced in" and that it was waiting for a better entry point to turn more positive.

On Monday, Aegis Capital Corp upgraded Snap to buy from hold, in what the firm noted was the first time it had recommended the stock "since our pre-IPO initiation work, when we were skeptical of Snap's ability to drive user growth." Now, analyst Victor Anthony sees fundamentals improving to the point that he no longer thinks Spiegel should find a buyer for the company.

"Snap can stand on its own," he wrote.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

COMMENTS

More Related News

Biden Says He Would Consider Giving Ambassadorships to Donors
Biden Says He Would Consider Giving Ambassadorships to Donors

(Bloomberg) -- Joe Biden said Friday he would not rule out appointing donors as ambassadors, but wouldn't make decisions about those roles based on someone's financial contributions."Nobody in fact will be appointed by me based on anything they contributed," he told a group of reporters aboard his "No Malarkey" bus in Decorah, Iowa."But, for example, you have some of the people who are out there that are prepared to in fact, that are fully qualified - head of everything from being the ambassador to NATO to be the ambassador to France or any other country - who may or may not have contributed, but that will not be any basis upon which I in fact would appoint anybody."Other Democratic...

Nord Stream 2 Sanctions to Be Included in Must-Pass Defense Bill
Nord Stream 2 Sanctions to Be Included in Must-Pass Defense Bill

(Bloomberg) -- Sanctions aimed at blocking the Nord Stream 2 natural gas pipeline from Russia to Germany were included by U.S. lawmakers a must-pass defense bill, according to two people familiar with the legislation.The sanctions, which would apply to companies building the pipeline project of Russian energy company Gazprom PJSC, are modeled after a bill introduced earlier this year by Senators Ted Cruz, a Texas Republican, and Jeanne Shaheen, a New Hampshire Democrat.The measure targets vessels that lay the pipeline as well as executives from companies linked to those vessels, who could be denied visas and have transactions related to their U.S.-based property or interests blocked.The...

Trump Appeals to Supreme Court on Financial-Records Subpoena
Trump Appeals to Supreme Court on Financial-Records Subpoena

(Bloomberg) -- President Donald Trump asked the U.S. Supreme Court to hear his challenge to a House subpoena for financial records held by his accounting firm, saying lawmakers are exceeding their authority with a broad probe into his personal and business affairs.The appeal comes in one of three subpoena

Warren Isn
Warren Isn't a Wonk and Buttigieg Isn't a Moderate

(Bloomberg Opinion) -- Mayor Pete Buttigieg of South Bend, Indiana, and Massachusetts Senator Elizabeth Warren have been cast as the "wonk" candidates in the Democratic presidential primary: the cerebral number-crunchers putting out detailed and thoughtful policy proposals, with hers being ambitious and left-wing and his modest and moderate.But both the contrast and the wonkiness are overstated. In key respects, Buttigieg is running on a Warren-lite agenda. Some of their plans also have more to do with achieving political and ideological objectives than with solving any pressing problem in American life.In the past, some Democrats have been open to reining in the growth of Social Security...

Indonesia to Fire Garuda CEO After Harley Smuggled on Jet
Indonesia to Fire Garuda CEO After Harley Smuggled on Jet

(Bloomberg) -- The chief executive officer of airline PT Garuda Indonesia is getting fired for allegedly ordering a classic Harley-Davidson motorcycle to be smuggled into the country on a brand new Airbus jet.I Gusti Ngurah Askhara Danadiputra will be dismissed after the airline's audit committee found

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy