Top Analyst: Snap Inc’s (SNAP) Product Innovation in the Long Run Can Make Up for Tough 2017

Drexel Hamilton's Brian White is bullish on SNAP stock, believing its new innovations and fresh original content can translate to higher user engagement and surging revenue down the line.


Snap Inc (NYSE:SNAP) is closing out 2017, or what top analyst Brian White at Drexel Hamilton has called its “year of innovation,” thanks to a grand Lens Studio flourish that will allow users to come up with their own unique Lens and share with friends.

In reaction, the analyst reiterates a Buy rating on SNAP stock with a price target of $28, which implies a 76% upside from current levels.

For context, the analyst notes that these “Lenses are widely used across the Snapchat platform and described by Snapchat as ‘interactive animations that are overlaid on a person’s face or the world around them.'”

White acknowledges this may have been a rough year for the company as far as meeting Wall Street expectations, he continues to be as bullish as ever on its creative endeavors and potential in the tech-verse: “Despite a tough year for Snap in 2017 relative to Street estimates, the company continues to grow at a very rapid clip, deliver new innovations and roll out new original content that we believe will further increase user engagement.” This is the exact kind of product innovation momentum that White bets will generate user gains and drive a boost in user engagement levels, all while eventually leading to a spike in advertising revenue.

“In an age of short-term thinking, imitation and a maniacal focus on the next quarterly earnings report, Snap is taking the road ‘less traveled’ and ultimately we believe this can make ‘all the difference’ in the long run,” continues the analyst.

“Additionally, Snap recently made big design changes to the Snapchat platform with ‘new Snapchat’ that separates social experiences (e.g., Chats and Stories from friends; left side of Snapchat) from the media (Stores from publishers, creators and the community; right side of Snapchat), while adding a dynamic Friends page,” White surmises.

Brian White has a very good TipRanks score with a 67% success rate and a high ranking of #106 out of 4,717 analysts. White garners 13.5% in his annual returns. When recommending SNAP, White realizes 6.3% in average profits on the stock.

TipRanks highlights a cautious majority voicing expert opinion on the tech darling of the millennial court. Based on 24 analysts polled in the last 3 months, 6 rate a Buy on Snap stock, 11 maintain a Hold, while 7 issue a Sell on the stock. The 12-month average price target stands at $13.47, marking a 15% downside from where the stock is currently trading.