Loop Capital maintained its Buy rating and $14.00 price target for Snap Inc (NYSE: NYSE:SNAP), following the Snap partner summit in Santa Monica. The firm's stance remains steady as the social media company demonstrates ongoing progress, albeit with an uneven recovery in advertising revenue. Snap's Monthly Active Users (MAUs) have surged by 100 million since the previous year's summit, reaching a new high of 850 million.
The summit highlighted Snap's potential in the augmented reality (AR) glasses market, with expectations of long-term leadership despite no immediate impact on the stock. Loop Capital anticipates that Snap's efforts to unify content and advertisements will pave the way for new optimization opportunities. Additionally, improvements to the app's install ads are projected to contribute to the growth of Direct Response revenue.
Despite the positive outlook on user growth and technological advancements, the near-term outlook for the brand's revenue remains subdued. The company's advertising revenue, particularly from brand partnerships, is expected to stay weak in the short term.
Loop Capital's reiteration of the Buy rating and price target reflects confidence in Snap's strategic initiatives and growth trajectory, even as it navigates the current challenges in the advertising sector.
Snap Inc. has been making significant strides in its operations. The tech giant reported a 16% year-over-year increase in total revenue, reaching $1.24 billion in Q2 2024, with advertising revenue accounting for $1.13 billion. Looking into Q3 2024, Snap anticipates a revenue growth of 12% to 16%, with an estimated Adjusted EBITDA ranging from $70 million to $100 million.
Snap's partner, Sahara AI, recently secured $43 million in a funding round led by Pantera Capital, a move expected to enhance Sahara AI's team, platform performance, and developer ecosystem. This development follows Snap's Partner Summit, where it showcased a focus on a more user-friendly experience, AI features, and new offerings for creators and developers.
Several analyst firms have weighed in on Snap's recent developments. KeyBanc maintained its Sector Weight rating on shares of Snap, indicating a neutral stance. Similarly, JMP Securities, Citi, and Roth/MKM continue to maintain their Market Perform, Neutral, and Neutral ratings respectively.
Conversely, Deutsche Bank and BMO Capital Markets uphold their Buy and Outperform ratings, suggesting a positive outlook on the company's shares.
Finally, Snap has welcomed Jim Lanzone, the current CEO of Yahoo Inc., to its board of directors. The company's Snapchat Plus subscription service now boasts over 11 million subscribers, reflecting Snap's ongoing commitment to growth and innovation in the tech industry.
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