B. Riley starts Snap at Neutral, says premium valuation looks ‘full’

As previously reported, B. Riley initiated coverage of Snap with a Neutral rating and $11 price target. The company’s sizable audience positions the company to generate growing advertising and subscription revenue streams and to increase profitability, but while its direct-response ads are viewed to be the primary drivers of growth in the near term, the brand ad growth on its platform is set to lag, the analyst tells investors in a research note. A pickup in North American time spent and monetization gains from ad platform improvements could drive potential upside to the firm’s estimates, but it is hard to predict their magnitude and timing, the firm adds, also noting that the stock is trading at a premium to its peer group and that its valuation looks “full”.