Alex Cho

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Best tech/finance blogger on TipRanks. Alex Cho is ranked 7th among all financial bloggers, with a sector focus of technology stocks. The research he publishes captures the long-term growth potential of tech franchises, and market valuation. His research recommendations over the span of five-years has averaged into an annualized return of 19.3% across 392 ratings of which 66% were successful. Over his years of publishing, Alex Cho has been an indispensable source of information for an investment minded audience, which is why his lifetime viewership has exceeded ten million in total since 2012, across various media platforms. Furthermore, he’s frequently cited in various local business journals across the United States, and is frequently tagged with the “in-depth” designation on Google News for his public articles. The quality of his research is well known, and is well-respected which is why he’s frequently cited by other authors, journalists, bloggers and experts. Alex Cho was a former founding partner of Alexander & Cohen Capital Management, has worked as a consultant for mid-stage tech companies looking to raise capital or form an exit strategy, with the most recent consultation billed to a client that was generating revenue of $10 million+ in the web domain/registrar segment. Alex Cho is frequently invited to interview members of management at various Fortune 500 tech companies’ due to his outstanding media credentials, and credibility. Furthermore, he frequently attends various tech media events at the request of the event organizers. Alex Cho has a great relationship with Wall Street and Silicon Valley, as well. In the Venture Capital Space, he has sources that are inclusive of VC Partners, and independent research from PitchBook, Mercury Data, eMarketer, MergermarketGroup, and so forth. Anyone facing the public with investment related material needs quality sources, which should be inclusive of insights from Private Equity and various sell-side institutions and debt rating agencies as well (Standard & Poor’s, Fitch, & Moody’s). Alex Cho publishes with the support of Bank of America Merrill Lynch, Morgan Stanley Americas, Royal Bank of Canada Capital Markets, United Bank of Switzerland AG, Barclays Americas, Goldman Sachs, J.P. Morgan, Credit Suisse AG, PiperJaffray, Wedbush Securities, Oppenheimer & Co., Nomura Securities, BMO Capital Markets, Raymond James, Pacific Crest, SunTrust, Mizuho Securities, Deutsche Bank and Canaccord Genuity. Alex Cho attended ASU via the MAPP program with a 3.76 GPA in business-finance. The genius behind Cho has less to do with his academic accomplishments, but rather his ability to navigate, adapt, and improve the quality of his work through all the activities he has engaged. In the past year, Alex Cho has launched a new marketplace service referred to as Cho’s Investment Research. To learn more about this service, or to receive article notifications, be sure sure to subscribe. We provide frequent updates via our Blog Posts, which goes out to our subscribers.

A Balanced Take on Snap Stock Following First Snap Partner Summit


On April 4th, 2019 Snap (SNAP) held the Snap Partner Summit, which came with a bevvy announcements that brought much needed hype or expectation tied to the stock. The biggest announcement from the event, or what would be impactful to financial results was mobile gaming and ad kit. These two features could be additive to revenue. Snap also announced a number of new features tied to the app, with more camera features, added lens functionality, and the introduction of a number of new shows or Snap originals tied to conventional TV networks.

What was special about the event, wasn’t the fact that they made-up new features that could drive engagement, but because shareholders could get a better depiction of where the company is going, or more specifically, what feature differentiations that could help with differentiating the social experience tied to Snapchat versus Facebook, Instagram, and Twitter. The stock rallied by more than 5% following the event, and even into the after-hours.

Now, on the surface, Snapchat has been able to appeal to the younger demographics due to the differentiated UI and the emphasis on sharing content in a more private format that’s not as privacy intrusive. They doubled-down on their privacy narrative, which the audience liked, and they announced a number of features that help with their augmented-reality shift, and community-based development of various features, such as Snapchat lenses. In totality, the event was a success in that it was the first time we as outsiders or shareholders could take on a perspective look as to where they’re developing competency at scale as a company versus competing social apps.

In terms of what might be the future for Snapchat, the social gaming functionality they intend to release with a number of titles was the most promising. They managed to create games that were more mobile oriented and could be accessed in a sort of party-feature that other platforms don’t support as effectively (even inclusive of consoles). That key differentiator might have sparked the most excitement following the announcement, as Snapchat does sit on the highest engaged demographic of under-35 gamers, or the audience that’s most likely to adopt gaming as a feature tied to the social app.

For example, Barclays provided estimates on the expected impact from mobile gaming assuming similar ARPU (average revenue per user figure) that’s attached to other social media platforms.

Source: Barclays

Ross Sandler at Barclays believes the gaming features could be adopted by roughly 15% to 43% of Snapchat’s Daily Active Users (DAUs), which should translate to a revenue figure of $15 million to $87 million assuming $0.50 to $1.00 in revenue per user. The impact this might have is fairly minimal as a percentage of forecasted revenue, but at least they have something additional that might appeal to its gen Y and gen Z cohort of users.

Meanwhile, Brian Nowak from Morgan Stanley was mostly unimpressed by the event:

That said, we question the scalability of this third party ad networks as 1) SNAP will be competing with GOOGL’s leading data, reach and AdMob product 2) The SNAP financial impact is likely to be small, as we would expect to have to offer publishers attractive revenue share (70%+) to compete with GOOGL and 3) We saw this before with Facebook Audience Network (FAN) which has been around since 2014 and has struggled (in our view).

On one hand, the efforts Snapchat put on display with its own ad network efforts might not be as additive to financial results, or third-party audience network, which they announced at the event via Ad Kit. Though uptake might be slow, it doesn’t hurt that SNAP is looking constructively to grow engagement on its platform, and open other pathways to revenue growth/upside long-term.

Instead of making some grand overhaul to the social app, they made some incremental adjustments and changes that would appeal to its young yet fickle userbase, which was the biggest takeaway from the event. It might not impact sales or earnings significantly, but they’re making internal efforts to improve features tied to the app experience, and with the addition of more camera features that could help with identifying products that can be purchased on Amazon, or the use of the camera app for purposes of discovery with Shazam like features, they’re doing more to deliver upon social functionality that could be additive to the longer-term narrative around the app where other social platforms have stalled in developing new features tied to social (not a whole lot new in the way of social functionality add-ons from either Twitter of Facebook lately).

What was more surprising wasn’t the fact that any reasonable shareholder would anticipate some meaningful short-term impact from any of the announcements, but the fact that they were able to jampack a room full of people with something interesting or constructive to say with regards to the core social features tied to the app, and without the negative perceived bias tied to these new developments following the design change of Snapchat from 2017, which was broadly unpopular.

Granted, not everyone is as enthusiastic about SNAP, as TipRanks analytics reveal the stock as a Hold. Out of 27 analysts polled in the last 3 months, 5 are bullish on SNAP stock, 19 remain sidelined, while 3 are bearish on the stock. Worthy of note, the 12-month average price target stands at $9.64, which implies over 20% downside from current levels. Wall Street needs to see more from the social media giant before getting more confident on the story. (See SNAP’s price targets and analyst ratings on TipRanks)

 

Read more on SNAP: Top Analyst Shares Two Cents on Snap (SNAP) Stock Ahead of First Product Show

 

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