Snap (NYSE:SNAP) Cut to “Sell” at Zacks Investment Research

Zacks Investment Research lowered shares of Snap (NYSE:SNAP) from a hold rating to a sell rating in a research report report published on Tuesday morning, Zacks.com reports. They currently have $44.00 price objective on the stock.

According to Zacks, “Snap has been benefiting from improving user engagement, particularly in the 13-34-year-old demography, which is expanding its advertiser base. Strong adoption of Augmented Reality (AR) Lenses, Discover content and Shows is driving user growth. Additionally, expanding Snap original show content, as well as new features like Spotlight, Cartoon Lens and Bitmoji for Games is expected to boost active user engagement in the near term. Notably, shares have outperformed the industry in the past year. However, Snap has been facing supply-chain issues and threat of losing advertising partners from privacy changes that Apple implemented on its iOS platform earlier this year. Increasing investments in content, AR-lenses and marketing may hurt profitability in the near term. Moreover, stiff competition for ad dollars from Meta Platforms is a concern.”

Several other research firms have also recently weighed in on SNAP. Citigroup upgraded Snap from a sell rating to a neutral rating in a research note on Monday, November 1st. Royal Bank of Canada decreased their price target on Snap from $88.00 to $70.00 and set an outperform rating for the company in a research note on Friday, October 22nd. Barclays decreased their price target on Snap from $81.00 to $77.00 and set an overweight rating for the company in a research note on Friday, October 22nd. Evercore ISI upgraded Snap to a buy rating and set a $74.00 price target for the company in a research note on Thursday, December 9th. Finally, UBS Group initiated coverage on Snap in a research report on Thursday, December 2nd. They set a buy rating and a $67.00 price objective for the company. One equities research analyst has rated the stock with a sell rating, seven have given a hold rating and twenty-seven have issued a buy rating to the company. According to MarketBeat, the company currently has an average rating of Buy and a consensus target price of $72.55.

Snap stock opened at $38.04 on Tuesday. The company has a current ratio of 5.53, a quick ratio of 5.53 and a debt-to-equity ratio of 0.65. The business’s fifty day simple moving average is $48.11 and its two-hundred day simple moving average is $62.66. Snap has a 12 month low of $36.56 and a 12 month high of $83.34. The company has a market capitalization of $61.24 billion, a price-to-earnings ratio of -90.57 and a beta of 1.07.

Snap (NYSE:SNAP) last released its earnings results on Thursday, October 21st. The company reported ($0.05) EPS for the quarter, topping the Thomson Reuters’ consensus estimate of ($0.11) by $0.06. Snap had a negative return on equity of 23.65% and a negative net margin of 16.72%. The business had revenue of $1.07 billion for the quarter, compared to the consensus estimate of $1.09 billion. During the same period in the previous year, the company posted ($0.14) earnings per share. On average, equities research analysts predict that Snap will post -0.42 EPS for the current year.

In other news, CAO Rebecca Morrow sold 8,817 shares of the business’s stock in a transaction on Monday, October 18th. The shares were sold at an average price of $74.44, for a total transaction of $656,337.48. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CTO Robert C. Murphy sold 950,000 shares of the business’s stock in a transaction on Monday, October 25th. The shares were sold at an average price of $54.73, for a total transaction of $51,993,500.00. The disclosure for this sale can be found here. Insiders have sold a total of 1,459,277 shares of company stock worth $80,718,365 in the last 90 days.

A number of large investors have recently added to or reduced their stakes in SNAP. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp lifted its stake in Snap by 14.4% in the second quarter. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp now owns 173,893 shares of the company’s stock worth $11,849,000 after acquiring an additional 21,943 shares during the period. Atria Investments LLC bought a new position in Snap in the second quarter worth about $1,811,000. Mid Atlantic Financial Management Inc. ADV bought a new position in Snap in the second quarter worth about $234,000. Ethic Inc. bought a new position in Snap in the second quarter worth about $216,000. Finally, South State Corp raised its holdings in Snap by 9.5% in the second quarter. South State Corp now owns 15,331 shares of the company’s stock worth $1,045,000 after purchasing an additional 1,325 shares in the last quarter. 54.65% of the stock is owned by institutional investors.

Snap Company Profile

Snap, Inc engages in the operation of its camera platform. Its products include Snapchat, using the camera and editing tools to take and share Snaps, Friends Page, which lets users create and use Stories, Groups, Video and Chat, Discover for searching and surfacing relevant Stories, Snap Map, which shows friends, Stories and Snaps near the user, Memories, for saving personal collections, and Spectacles, wearable sunglasses capable of taking Snaps and interacting directly with the Snapchat application.

Further Reading: Arbitrage

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