Snap Inc (NYSE:SNAP) investors are having a rough morning after the company’s first results was less than rosy, with Snap’s lack of quarterly guidance leading to a widely varying range of estimates on both the top- and bottom-lines. Snap also posted fewer DAU additions than investors were looking for, prompting concerns about competition with Facebook and the company’s ability to grow users outside of the U.S.
In reaction, Snap shares are falling over 20% to $17.82 in Thursday’s trading session.
However, Drexel Hamilton analyst Brian White recommends to buy the Yellow Specter on weakness. The analyst reiterates a Buy rating on SNAP with a price target of $30, which represents a potential upside of 67% from where the stock is currently trading.
White commented, “Given the size of the opportunity in front of Snap and the early stages of the company’s development, we do not believe it is constructive to nitpick on every detail of the company’s first few quarterly reports, or investors risk missing the forest for the trees.”
“Given this was Snap’s inaugural earnings call, we felt the team did an excellent job articulating the company’s strategic priorities and vision, while also answering questions. Given Snap’s fear of getting caught up in shortterm thinking over building a differentiated, sustainable business for the long term, management did not provide any guidance last night (nor in the future),” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian White has a yearly average return of 10.9% and a 65% success rate. White has a 12.7% average return when recommending SNAP, and is ranked #128 out of 4564 analysts.
Out of the 38 analysts polled in the past 12 months, 13 rate Snap stock a Buy, 18 rate the stock a Hold and 7 recommend to Sell. With a return potential of 23%, the stock’s consensus target price stands at $21.93.