Snap (NYSE:SNAP) Downgraded by Zacks Research to Strong Sell

Key Points

• Zacks Research downgraded Snap to “strong sell” from “hold,” although analyst opinions remain mixed. The broader consensus is “hold,” with an average price target of $7.65.
• Snap’s latest quarterly results beat expectations: revenue rose 18.9% year over year to $1.60 billion, while its $0.10-per-share loss was narrower than forecast. However, the company remains unprofitable, with analysts expecting a full-year loss.
• Insiders sold approximately 2.87 million shares worth $15.9 million over the past 90 days, including a 2-million-share sale by the chief technology officer. Institutional investors and hedge funds own 47.52% of Snap’s stock.

Snap (NYSE:SNAP - Get Free Report) was downgraded by research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a report released on Monday,Zacks.com reports.

Other equities analysts have also recently issued research reports about the stock. KeyCorp raised shares of Snap from a "sector weight" rating to an "overweight" rating in a research note on Monday, April 27th. Truist Financial lowered their price objective on shares of Snap from $8.00 to $7.00 and set a "hold" rating on the stock in a research note on Tuesday. TD Cowen began coverage on shares of Snap in a report on Monday, April 27th. They issued a "buy" rating on the stock. Rothschild & Co Redburn upgraded shares of Snap from a "neutral" rating to a "buy" rating and set a $10.00 target price for the company in a report on Monday, April 27th. Finally, Canaccord Genuity Group decreased their price target on shares of Snap from $7.00 to $6.00 and set a "hold" rating on the stock in a research report on Tuesday, April 14th. One analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, twenty-four have issued a Hold rating and three have given a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average price target of $7.65.

Snap Trading Up 14.3%

Shares of NYSE:SNAP opened at $5.76 on Monday. The company has a quick ratio of 3.53, a current ratio of 3.53 and a debt-to-equity ratio of 1.67. The company's 50-day moving average price is $4.96 and its 200 day moving average price is $5.33. The company has a market cap of $9.73 billion, a PE ratio of -24.00 and a beta of 1.03. Snap has a fifty-two week low of $3.81 and a fifty-two week high of $9.55.

Snap (NYSE:SNAP - Get Free Report) last posted its earnings results on Monday, August 3rd. The company reported ($0.10) EPS for the quarter, topping the consensus estimate of ($0.12) by $0.02. Snap had a negative net margin of 4.90% and a negative return on equity of 14.16%. The firm had revenue of $1.60 billion during the quarter, compared to analysts' expectations of $1.54 billion. During the same quarter in the prior year, the firm earned ($0.16) EPS. Snap's quarterly revenue was up 18.9% on a year-over-year basis. Sell-side analysts anticipate that Snap will post -0.07 earnings per share for the current year.

Insider Buying and Selling

In other news, CAO Rebecca Morrow sold 16,729 shares of the business's stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $5.60, for a total transaction of $93,682.40. Following the sale, the chief accounting officer owned 512,811 shares in the company, valued at $2,871,741.60. The trade was a 3.16% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CTO Robert C. Murphy sold 2,000,000 shares of the company's stock in a transaction that occurred on Wednesday, May 13th. The shares were sold at an average price of $5.44, for a total transaction of $10,880,000.00. Following the completion of the sale, the chief technology officer owned 47,012,324 shares of the company's stock, valued at approximately $255,747,042.56. This trade represents a 4.08% decrease in their position. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 2,868,059 shares of company stock valued at $15,855,631.

Institutional Trading of Snap

Several large investors have recently added to or reduced their stakes in SNAP. Vanguard Group Inc. boosted its position in shares of Snap by 0.6% in the fourth quarter. Vanguard Group Inc. now owns 101,251,557 shares of the company's stock worth $817,100,000 after buying an additional 641,271 shares during the period. Capital World Investors grew its stake in Snap by 1.4% during the 4th quarter. Capital World Investors now owns 88,452,006 shares of the company's stock valued at $713,808,000 after acquiring an additional 1,179,543 shares in the last quarter. Alyeska Investment Group L.P. purchased a new position in Snap during the 3rd quarter valued at about $176,697,000. Geode Capital Management LLC increased its holdings in shares of Snap by 3.6% in the 4th quarter. Geode Capital Management LLC now owns 13,525,119 shares of the company's stock valued at $108,711,000 after purchasing an additional 469,795 shares during the period. Finally, Voloridge Investment Management LLC increased its holdings in shares of Snap by 53.3% in the 3rd quarter. Voloridge Investment Management LLC now owns 10,300,911 shares of the company's stock valued at $79,420,000 after purchasing an additional 3,582,223 shares during the period. 47.52% of the stock is owned by institutional investors and hedge funds.

Snap News Summary

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Q2 results exceeded expectations. Snap reported revenue of $1.60 billion, up 18.9% year over year and above the $1.54 billion consensus estimate. Its adjusted loss of $0.10 per share was narrower than the expected $0.12 loss. Snap second quarter results lifted by improving advertising trends
• Positive Sentiment: Advertising momentum and profitability improved. Management cited stronger demand from large North American advertisers, World Cup-related spending, AI tools and subscription growth. Adjusted EBITDA reportedly surged 505%, while the company highlighted margin expansion and positive free cash flow. SNAP's Q2 Revenues Climb 19% Y/Y, Adjusted EBITDA Surges 505%
• Positive Sentiment: Third-quarter guidance was encouraging. Snap forecast revenue of approximately $1.7 billion, in line with consensus but signaling continued growth and helping reinforce the post-earnings rally. Snap stock jumps as World Cup ads, AI tools drive earnings beat and strong outlook
• Neutral Sentiment: Analyst views remain cautious. Wells Fargo and Citigroup raised their price targets to $6.00 and $6.75, respectively, while Truist and Rosenblatt lowered theirs to $7.00 and $6.00. Ratings largely remain neutral or hold, indicating that much of the near-term optimism may already be reflected in the stock.
• Neutral Sentiment: Technical resistance could limit gains. Snap is approaching a potential resistance level after moving above its 50-day average, although it remains near its 200-day average. Stock Of The Day: Is Snap Breaking Out?
• Negative Sentiment: Losses and execution risks persist. Snap remains unprofitable, and its CEO avoided giving details about pre-order demand for Specs smart glasses ahead of the September launch, leaving investors with limited visibility into the product’s prospects. Snap CEO sidesteps Specs pre-order questions

Snap Company Profile

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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