Snap Inc (NYSE:SNAP) gets another key buy today from top analyst Mark Mahaney at RBC Capital, who sees that in a game of copycat, Facebook and Instagram’s move to mirror Snap’s inventive ways further prove that the company is in full, fierce “crackle” mode.
Highlighting massive market potential, with global advertising gearing up to hit $767 billion within 3 years and mobile advertising to land on $196 billion, as well as a unique, “engaging” appeal to consumers and advertisers alike, the analyst offers his first note on Snap with enthusiastic conviction in its possibilities. As such, the analyst initiates coverage on SNAP with an Outperform rating and a price target of $31, which implies a just under 34% upside from where the stock is currently trading.
From Mahaney’s eyes, the popular Snapchat app parent company is “One Of The Best Innovation Machines On The ‘Net Today,” as he believes, “Product innovation has been arguably the most important success ingredient across the ‘Net sector. And the level of product innovation from SNAP has been extremely impressive, on both the consumer & advertiser side. We believe SNAP has taken steps to ensure robust product innovation going forward. And we see the company’s current limited DAU base (158MM or ~1/10th the size of FB) and its current low ARPU ($1.05 or ~1/7th that of FB) as creating substantial growth opportunities. Also, we see FB & TWTR’s history providing evidence of SNAP’s ability to scale profitably.”
Ultimately, “Snap has become an innovation leader – for both consumers and advertisers – in arguably the single fastest advertising medium today – Mobile. It has also emerged as one of the leading Media Platforms for Millenials. We believe that if it sustains its current level of innovation, it can sustain premium growth for a long time and scale to profitability,” Mahaney contends.
Mark Mahaney has a very good TipRanks score with a 73% success rate and a high ranking of #9 out of 4,554 analysts. Mahaney garners 19.6% in his yearly returns. When recommending SNAP, Mahaney earns 0.0% in average profits on the stock.
TipRanks analytics demonstrate SNAP as a Hold. Out of 28 analysts polled by TipRanks in the last 3 months, 10 are bullish on Snap stock, 11 maintain a Hold, while 7 are bearish on the stock. With a return potential of nearly 2%, the stock’s consensus target price stands at $23.18.
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