Today’s announcement of the resignation of Snap’s (SNAP) Chief Strategy Officer Imran Khan continues a trend over the last two years of high-level executive departures, most recent of which was CFO Drew Vollero four months ago, along with 5 other executives. In other words, Khan was one of the last remaining executives from the management team that took the struggling parent of Snapchat app public.
Aegis’ top analyst Victor Anthony commented, “We View His Departure As A Negative Given Current Challenges. Given his instrumental and highly visible role within the company, we view his departure as a negative for Snap. The company faces a bevy of operational challenges, including: 1) challenges driving DAU growth; 2) advertiser demand remains lukewarm; 3) the negative user reception from the app redesign; 4) unknown timing of the rollout of the rebuilt Android app; 5) unknown full impact from GDPR; 6) heightened competition from Facebook, Twitter, and Instagram for both users and ad dollars; 7) the threat of U.S. regulations of social media and Internet platforms, although we believe this threat is mostly political and likely goes away overtime; 8) an unclear strategy of how their hardware efforts will benefit the business; and 9) from what we understand, low employee morale. Furthermore, we believe the 3Q18 FactSet consensus revenue estimate of $284M is too high.”
Net net, Anthony reiterates a Hold rating on Snap shares, with a price target of $12, which represents a potential upside of 25% from where the stock is currently trading.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Victor Anthony has a yearly average return of 17.3% and a 66% success rate. Anthony is ranked #109 out of 4871 analysts.
Wall Street backs Anthony’s caution here, as TipRanks analytics reveal SNAP as a Hold. Based on 17 analysts polled by in the last 3 months, 3 rate a Buy on the stock, 9 maintain a Hold, while 5 issue a Sell. The 12-month average price target stands at $12.50, marking nearly 30% upside from current levels. (See SNAP’s price targets and analyst ratings on TipRanks)