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Wedbush stays bearish on Snap ahead of earnings

Published 02/02/2018, 11:38 AM
© Reuters.  Wedbush stays bearish on Snap ahead of earnings
SNAP
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  • Snap (SNAP -1.2%) is still facing decelerating growth, hot competition and an ongoing lack of profitability, Wedbush says in a note reiterating a Neutral rating before the company's Tuesday earnings report.
  • Michael Pachter is sticking with a $9 price target, implying 35% downside to shares.
  • User growth is going to stay modest for the foreseeable future, in part due to already high penetration among the young and a focus on iOS that limits international adoption, Pachter says.
  • "Despite improvements, Snap's ad product offerings still appear immature relative to competitors, and higher efficiency in the ad auction remains unlikely to induce incremental spending from large advertisers," he writes.
  • Snap reports after the close Tuesday; Wedbush is expecting a loss of $0.18/share on revenues of $238M, both to the low sides of overall consensus.
  • Now read: Snap: A Rising Phoenix


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