Snap (NYSE:SNAP) Shares Gap Up - Time to Buy?

Key Points

• Snap shares gapped up — the stock opened at $6.05 after a $5.60 close and last traded around $5.95 on ~36M shares, with a 50-day/200-day moving average of $4.87/$6.80 and a market cap of ~$10.3B.
• Analysts are mixed with a consensus rating of "Hold" and an average target of $8.06; recent moves include Mizuho and Cantor Fitzgerald cutting targets to $7 while Arete rates it a buy and BNP Paribas started at "strong sell".
• Snap missed EPS ($0.03 vs. $0.15 estimate) though revenue beat at $1.72B (+10.2% YoY), and insiders have sold sizeable stakes recently (including the CTO's 1,000,000-share sale); institutional investors own ~47.5% of the stock.

Snap Inc. (NYSE:SNAP - Get Free Report)'s share price gapped up prior to trading on Wednesday . The stock had previously closed at $5.60, but opened at $6.05. Snap shares last traded at $5.9520, with a volume of 36,028,949 shares changing hands.

Analysts Set New Price Targets

Several research analysts have weighed in on SNAP shares. Mizuho lowered their price target on shares of Snap from $9.00 to $7.00 and set a "neutral" rating on the stock in a report on Thursday, February 5th. Cantor Fitzgerald decreased their price objective on Snap from $9.00 to $7.00 and set a "neutral" rating on the stock in a report on Thursday, February 5th. BNP Paribas Exane started coverage on Snap in a report on Wednesday, January 14th. They issued a "strong sell" rating on the stock. Arete Research set a $7.30 price objective on Snap and gave the company a "buy" rating in a report on Tuesday, February 10th. Finally, Piper Sandler reaffirmed a "neutral" rating on shares of Snap in a report on Thursday, February 5th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, twenty have given a Hold rating and three have given a Sell rating to the company's stock. According to data from MarketBeat, the stock currently has a consensus rating of "Hold" and an average target price of $8.06.

Snap Price Performance

The company's fifty day moving average price is $4.87 and its 200 day moving average price is $6.80. The company has a market capitalization of $10.31 billion, a P/E ratio of -22.41 and a beta of 0.91. The company has a quick ratio of 3.56, a current ratio of 3.56 and a debt-to-equity ratio of 1.53.

Snap (NYSE:SNAP - Get Free Report) last announced its earnings results on Wednesday, February 4th. The company reported $0.03 EPS for the quarter, missing the consensus estimate of $0.15 by ($0.12). Snap had a negative return on equity of 20.72% and a negative net margin of 7.76%.The business had revenue of $1.72 billion for the quarter, compared to the consensus estimate of $1.70 billion. During the same period in the prior year, the business posted $0.01 earnings per share. The firm's revenue for the quarter was up 10.2% compared to the same quarter last year. As a group, sell-side analysts forecast that Snap Inc. will post -0.3 EPS for the current year.

Insider Activity at Snap

In other news, CAO Rebecca Morrow sold 16,499 shares of the firm's stock in a transaction that occurred on Tuesday, February 17th. The shares were sold at an average price of $4.70, for a total transaction of $77,545.30. Following the transaction, the chief accounting officer directly owned 466,682 shares of the company's stock, valued at approximately $2,193,405.40. This trade represents a 3.41% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CTO Robert C. Murphy sold 1,000,000 shares of the firm's stock in a transaction that occurred on Tuesday, February 10th. The stock was sold at an average price of $5.36, for a total transaction of $5,360,000.00. Following the transaction, the chief technology officer directly owned 49,313,775 shares in the company, valued at $264,321,834. This represents a 1.99% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last three months, insiders sold 2,546,926 shares of company stock valued at $13,250,655.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the company. Corient Private Wealth LLC increased its stake in Snap by 14.2% in the fourth quarter. Corient Private Wealth LLC now owns 56,092 shares of the company's stock valued at $453,000 after acquiring an additional 6,956 shares during the last quarter. Tobam increased its stake in Snap by 953.3% in the fourth quarter. Tobam now owns 47,305 shares of the company's stock valued at $382,000 after acquiring an additional 42,814 shares during the last quarter. Alpine Global Management LLC bought a new position in Snap in the fourth quarter valued at approximately $185,000. SB Capital Management Inc bought a new position in Snap in the fourth quarter valued at approximately $596,000. Finally, Alberta Investment Management Corp bought a new position in Snap in the fourth quarter valued at approximately $1,434,000. 47.52% of the stock is owned by institutional investors.

About Snap

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.

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