Brian Pitz, an analyst from BMO Capital, maintained the Buy rating on Snap (SNAP – Research Report). The associated price target was lowered to $13.00.
Brian Pitz has given his Buy rating due to a combination of factors that highlight Snap’s potential for growth despite current challenges. A key reason for the positive outlook is the impressive 14% year-over-year growth in direct response advertising, which remained stable even amid tougher comparisons. This growth is supported by a 60% increase in active advertisers, indicating strong advertiser interest and engagement.
Additionally, Snap’s focus on creators is unlocking new revenue opportunities, as evidenced by a significant increase in Spotlight posts and Snapchat+ subscribers. These initiatives are expected to enhance monetization prospects in the coming years. While there are concerns about revenue visibility and a recent decline in North American daily active users, ongoing engagement strategies and AI/ML investments are anticipated to stabilize user trends. Overall, the risk-reward ratio appears attractive, making Snap a compelling long-term growth platform.
Pitz covers the Communication Services sector, focusing on stocks such as Alphabet Class A, Roblox, and Electronic Arts. According to TipRanks, Pitz has an average return of 14.3% and a 65.71% success rate on recommended stocks.
In another report released today, Jefferies also maintained a Buy rating on the stock with a $10.00 price target.