Snap (SNAP) was upgraded by Jefferies Financial Group from a “hold” rating to a “buy” rating in a research note issued on Thursday, Jan 9th. The firm has a $21.00 price target on the stock. Jefferies Financial Group’s price target points to a potential upside of 25.97% from the company’s previous close. Jeffries Analyst Brett Thill expects Snapchat’s stock momentum to continue in 2020, due to Snap’s accelerating user growth. The analyst expects the companies ad platform to fuel revenue growth over the next three years.
Snapchat User Growth
Snap’s daily active users have grown to 210 million, according to the social media company’s 2019 Q3 earnings, along with 50 percent year-over-year revenue growth as the company inches closer to profitability.
Snap (SNAP) has experienced three consecutive quarters of climbing user growth. In it’s Q3 earnings report, Snap reported an increase of 7 million in daily active users to a total of 210 million DAU’s. The company saw a 50% increase in YOY revenue growth, while also shrinking its losses from the previous quarter.
In Snap’s Q2 2019 earnings release, the company highlighted the significance of it’s Android App redesign that had driven further engagement on the platform. They saw a ”10% increase in the retention rate of people who open Snap for the first time.” During the earnings call transcript the company further says the average time per user per day was 30 minutes.
CEO Evan Spiegel said in a statement, ”The growth in our community, engagement and revenue is the result of several transitions we completed over the past 18 months. We look forward to building on our momentum and making significant ongoing progress in each of these areas.”
Snap has an institutional ownership of (42.12%). During Q3 2019, Snap saw a huge influx of institutional ownership. $890 Million worth of shares were purchased, up $827 Million compared to the previous quarter. Prime Capital Investment Advisors LLC increased its holdings to 19,800 shares up 942.1%, Stifel Financial Corp increased its holdings to 152,402 shares up 425.9% and Millennium Management LLC increased its holdings to 4,148,898 up 219.1% in Q3 2019.
Snapchat Price Target
Snap (SNAP) has been launching new products every year trying to keep up with growing social media platforms like Facebook (FB) and Tik Tok. Analysts at Cowen believe that with Snapchat’s growing user base (Both Domestic and International) will have a tremendous impact on their advertising business and revenue growth going forward. Snap is set to report its fourth-quarter and fiscal 2019 earnings after market close on Feb. 4.