In a research report issued yesterday, BTIG analyst Richard Greenfield initiates coverage with a Hold on Snap Inc. (NYSE:SNAP) without suggesting a price target, assessing shares to be “fairly valued.”
Commending the popular Snapchat app parent company’s compelling marriage of communication-meets-content, the analyst can’t help but notice all the copycats in the room, gunning to repeat Snap’s innovative tricks. While rivals are lurking to replicate CEO Evan Spiegel’s creative twists and turns, for Greenfield, the key to the company’s triumph over the competition boils down to “Spiegel’s ability to continue to out-innovate peers,” with “only Spiegel and his team [knowing] the product roadmap from here.”
Greenfield highlights daily active users as a key strength for Snap, with Snap-pers on average using the app 18 times a day, adding “[…] user-to-user communication remains the glue that keeps users addicted and constantly coming back.” Moreover, “As Snapchat sucks you back into its app continuously throughout the day, users end up creating more content using filters and lens that are shared privately through chat or via stories, […] consuming stories from their connections as well as Discover content (albeit we believe Discover represents just 2% of usage to-date),” continues the analyst.
2017 already rings with the promise of even more product launches to roll out, which Greenfield believes makes “Spiegel’s decision not to sell Snapchat [look] anything but crazy as they have clearly iterated the product far beyond what any outsider could have comprehended at the time.”
However, while SNAP has solidified itself as an industry pioneer, Greenfield and investors still may feel like they are in a fog as to Spiegel’s next big creative stunt, and this uncertainty is what has the analyst surveying the Snap situation from the sidelines.
Ultimately, “The challenging part for us and investors is that we have absolutely no idea what products are coming next, nor if/how they will create reasons for consumers to spend more than the current 25 minutes per user per day on the platform (not to mention, how they could enable new revenue streams, such as story search creating the potential for search advertising),” contends Greenfield, cautiously optimistic on the wildcard stock.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Richard Greenfield is ranked #1,063 out of #4,557 analysts. Greenfield has a 60% success rate and realizes 9.1% in his annual returns. When recommending SNAP, Greenfield earns 0.0% in average profits on the stock.
TipRanks analytics exhibit SNAP as a Hold. Out of 35 analysts polled by TipRanks in the last 3 months, 12 are bullish on SNAP stock, while 16 are neutral, and 7 issue a Sell. With a return potential of 6%, the stock’s consensus target price stands at $23.48.