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Shares of Snap Inc. are up again on Wednesday as analysts applaud the company’s new growth targets and plans to significantly increase the revenue potential of its various features.
The social media company predicted on its Investor Day on Tuesday that it could generate revenue growth of at least 50% for several years, a projection that helped tip Snap’s SNAP.
stock in positive territory on Tuesday and led analysts’ praise on Wednesday.
Shares are up 0.4% Wednesday morning, after climbing 11.1% to a record close of $ 70.45 on Tuesday.
“Snap has become healthier in the aftermath of the pandemic thanks to an accelerating product pipeline, diverse demand from advertisers, a well-developed self-service advertising platform and a more engaged audience,” wrote Rohit Kulkarni, analyst at MKM Partners, who also alluded to the scarcity of a $ 100 billion company that wants to increase its revenue by 50% per year.
It has a buy rating and a target price of $ 83 on the stock, up from $ 65 before the event.
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Wells Fargo analyst Brian Fitzgerald wrote that the 50% target “by any reasonable interpretation would significantly exceed our past predictions and pre-event consensus” and argued that Snap “has enough leads in its five platforms. key forms (stories, camera, projectors, map and Communications) to concretize its perspectives. He is overweight stocks and raised his price target from $ 67 to $ 91.
Fitzgerald noted management’s optimistic tone about revenue opportunities through its products. Snap users open the Snapchat app 30 times a day on average, for example, and the “vast majority” of users use Snap’s augmented reality tools, some of which are sponsored by advertisers.
“We believe the camera will be a multi-billion dollar platform and that augmented reality represents our most exciting long-term opportunity,” CFO Derek Andersen said during the day’s investor presentation.
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For MoffettNathanson analyst Michael Nathanson, the presentation validated his bullish January upgrade of Snap stock. He titled his note to clients: “They are what we thought they were.”
Nathanson grabbed a comment from CEO Evan Spiegel a year ago, when he told investors that Snap would need to increase its annual revenue by more than 50% for several years to get closer to Twitter’s average income level per user, what Spiegel considered possible at the time.
“What seemed like a possibility before the COVID-19 pandemic now appears to be a realistic goal given the momentum of their business,” Nathanson wrote, while raising his price target on the share to $ 80 from 61. $.
Bernstein’s Mark Shmulik called Snap’s Investor Day “perfectly executed” and said the event made him “progressively confident in Snapchat’s march to super-app status and beyond.”
Apps like WeChat in China that bundle various services in one place are often referred to as super apps, and Shmulik argued that in the United States, “It’s no longer a scope to claim that Snapchat may be the closer to Super App status. ” He said the company is making progress in achieving both utility and entertainment value for users while ensuring that Snapchat is useful for single users as well as for people looking to do things as a group.
He has an outperformance rating on the stock and has increased his price target from $ 60 to $ 80.
Snap stocks have gained 56% in the past three months, the S&P 500 SPX,
increased by 7%.
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