- Snap Inc (NYSE:SNAP) recently shared its reduced expectations of Q2 FY22 revenue and EBITDA amid the challenging macroeconomic environment.
- Credit Suisse analyst Stephen Ju maintained an Outperform rating on Snap as it cut the price target from $77 to $59 (278.7% upside).
- Ju called out Snap's 1) minimal exposure to travel as consumer dollars flow from gross merchandise value/things to gross travel bookings/experiences, 2) higher exposure to weaker categories – entertainment, commerce, CPG, tech, and telco but the financials vertical is likely an incremental headwind (particularly crypto) – which grew 50% in 1Q22 and is a 3) likely victim of flight to larger platforms – given the uncertain macro/geopolitical environment and with only ~2% share of total ad budgets.
- The re-rating reflected 1) potential for better-than-expected DAU growth with a revamped Android app released in more geographies, 2) potential for better-than-expected ad revenue on ramping product rollouts and marketer adoption, 3) monetization optionality from increased engagement from Games, Maps, and longer-term Spotlight.
- Price Action: SNAP shares traded lower by 7.41% at $14.42 on the last check Tuesday.
- Photo by Souvik Banerjee from Pixabay
