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What Analysts Are Saying After Snap's Stunning Q1

Snap Inc. (NYSE: SNAP) released first-quarter financial results after markets closed Tuesday and the stock rocketed higher in response. Investors and analysts were in agreement, as the former sent Snap stock higher and the latter raised their targets for the photo-sharing service.

24/7 Wall St. has included some highlights from the earnings report, as well as what analysts said after the fact.

The company said that it had a net loss of $0.08 per share and $462 million in revenue, compared with consensus estimates that called for a net loss of $0.07 per share and $431.43 million in revenue. The same period of last year reportedly had a $0.10 per share net loss and revenue of $320.43 million.

During the quarter, daily active users (DAU) increased to 229 million from 190 million in the first quarter of last year. On average, more than 4 billion Snaps were created each day in the first quarter of 2020.

At the same time, average revenue per user increased by 20% to $2.02, compared to the first quarter from last year.

SunTrust Robinson Humphrey reiterated a Hold rating and raised its price target to $15 from $12. The firm further detailed in its report:

What’s Incremental To Our View While we’re turning incrementally positive on SNAP, lack of short/medium-term visibility into ad spend due to the effects of the coronavirus, and a valuation at the high-end of our IDM group (at ~10x FY20 EV/revs and 7.1x FY21 ests) keep us on the sidelines, even as we revise our estimates and PT up to $15 from $12. 1Q20 results show that SNAP’s competitive position continues to strengthen, and that accelerating DAU growth/engagement registered in the quarter reflect not only the shelter-in-place (caused by Covid-19), but also the operational turnaround, which began a year+ ago

Here’s what a few other analysts had to say:

  • Jefferies reiterated a Buy rating and raised its price target to $20 from $15.
  • UBS Group reiterated a Buy rating and raised its price target to $17 from $16.
  • Cowen reiterated it as Outperform and raised its price target from $16 to $19.
  • MKM Partners reiterated a Buy rating and raised its price target to $18 from $17.
  • RBC reiterated an Outperform rating and raised its target price to $21 from $18.
  • Goldman Sachs reiterated it as a Buy and raised its price target from $16 to $18.
  • Canaccord Genuity reiterated a Hold rating with a $15 target price.
  • Barclays reiterated it as Overweight and raised its price target to $20 from $19.
  • Oppenheimer upgraded it to Outperform from Market Perform and raised its target to $18.
  • JPMorgan reiterated an Overweight rating and raised its price target to $18 from $16.

Snap stock traded up about 27% to $15.85 on Wednesday, in a 52-week range of $7.89 to $19.75. The consensus price target is $15.86.

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