Snap Inc (NYSE:SNAP) shares collapsed 22% on its first earnings report as a public company in the wake of lighter-than-expected first-quarter results, which featured steeper-than-expected deceleration in both DAUs and ad revenue. Total revenue of $149.6 million, and adj. EBITDA of $188.2 million missed consensus estimates of $158.3 million and $180.7 million, respectively
Despite Wall Street’s pessimism, Jefferies’ top analyst Brian Fitzgerald points out that Snap’s engagement continues to push higher on its growing user base. As such, the analyst reiterates a Buy rating on Snap with a price target of $30, which represents a potential upside of 66% from where the stock is currently trading.
Fitzgerald noted, “Snap reported its first quarter as a public company showing both DAU & ARPU growth Y/Y. Engagement continues to increase on the platform with users on average spending 30+minutes/day. Expected seasonality in revenue led to a Q/ Q decline in ARPU, but we expect Snap to buck that trend as it continues to drive engagement and offers advertisers better targeting capability.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian Fitzgerald has a yearly average return of 21.3% and a 80% success rate. Fitzgerald has a 5.9% average return when recommending SNAP, and is ranked #19 out of 4564 analysts.
Out of the 38 analysts polled by TipRanks in the past 12 months, 13 rate Snap stock a Buy, 18 rate the stock a Hold and 7 recommend to Sell. With a return potential of 21.5%, the stock’s consensus target price stands at $21.97.
Earlier today, Twitter Inc (NYSE:TWTR) and the National Football League (NFL) announced a new multi-year live video programming partnership agreement. The deal includes a live 30-minute show five days a week during the NFL season, live pregame coverage on both Twitter and Periscope during the season, and officially licensed video content year-round.
Commenting on the deal, Wells Fargo analyst Peter Stabler says, “We view the deal as a positive, aligning with management’s strategy of bringing more premium live video content to the TWTR platform, softening the blow from TWTR’s loss of online streaming of the upcoming Thursday Night Football (TNF) season to AMZN, and potentially paving the way for the return of game live streams to TWTR at some point in the future.”
“Live Streaming Package Should Soften Financial Impact from TNF Loss. We note that TWTR management stated on the company’s 4Q’16 earnings conference call that TNF live streams exceeded internal financial expectations. While we believe that new content from the partnership is unlikely to match TNF streams in terms of total or average per episode viewership, we expect that higher weekly streaming duration, fullseason coverage, and a likely higher quantity of ad avails per hour should help soften the financial impact of the loss of TNF streams on 3Q’17 and 4Q’17 results,” the analyst continued.
According to TipRanks.com, analyst Peter Stabler has a yearly average return of 24.2% and a 84% success rate. Stabler has a 37.5% average return when recommending TWTR, and is ranked #196 out of 4564 analysts.
Out of the 26 analysts polled in the past 3 months, 3 are bullish on Twitter stock, 16 are neutral, and 7 remain bearish. With a downside potential of 19%, the stock’s consensus target price stands at $14.87.