BTIG reduces Snap's rating to sell, sees another 50% decline for equities

A Wall Street analyst is tired of waiting for Snap to release larger numbers and reduce its rating for sale, forecasting a further 50% drop in social media stock.

Since the IPO, Snap's stock has fallen by nearly 60%, a decline that many attributed to poor commitment growth, slow monetization and disappointing innovation from General Manager Evan Spiegel.

Greenfield was capital neutral since the beginning of the hedge in April 2017.

While Snapchat's parent company beat both earnings and revenue in the second quarter, executives revealed that the number of daily active users of the app had risen from 192 million to 188 million.

He also issued guidelines that did not meet analysts' expectations.

While Snap closed Tuesday at $ 9.89 per share, the analyst think it will fall to $ 5 per share in September 2019.

Others have pointed to Instagram's success on Facebook as a major hurdle for the Los Angeles-based Snap company. According to Instagram, since Instagram launched its Stories feature a little over two years ago, it now counts more than twice the daily active users of Snapchat.

"We were disappointed by the evolution of Snap's products (just like the users) and we see no reason to believe that it will change," continued Greenfield. "We have not seen significant innovations since the IPO, Snapchat has simply been outperformed by Instagram."

Jefferies has also trimmed its forecast on Snap, launching a new 12-month price target of $ 11 a share on Wednesday.

Echoing Greenfield's criticism, analyst Brent Thill told his clients that early analysis shows a persistent decline in user engagement in the third quarter.

"Although it's still too early to call, Snap's commitment wheel seems to have stagnated with daily active users and the time spent starting to head in the wrong direction," warned. 39; analyst. "Snap's position as a communication platform and content distribution platform is based on the need for users to have multiple friends on the platform."

"If users start using other services, this could lead to a negative flywheel because users are less inclined to open the application," he added.

Mr. Thill indicated that he has reduced his revenue forecast for 2019 to reflect the growing uncertainty surrounding user interest. He now sees his income at $ 1.53 billion for the year.

Disclosure: CNBC's parent company, NBCUniversal, is an investor in Snap.