TLDR
- Rothschild & Co Redburn upgraded Snap from Neutral to Buy, setting a $10 price target
- SNAP jumped as much as 8.14%, trading as high as $6.00 from a prior close of $5.65
- The upgrade cited expected GAAP profitability in 2025, stronger ad demand, and growing subscription revenue
- Analyst consensus remains a Hold with an average price target of $8.08 across 30 analysts
- Insiders sold over 2.5 million worth ~$13.3 million in the last quarter
Snap got a shot of confidence Monday after Rothschild & Co Redburn upgraded the stock from Neutral to Buy, sending it climbing as much as 8.14% during the session.
The stock hit a high of $6.00, up from Friday’s close of $5.65. Volume came in at around 6.8 million during mid-day trading.
Rothschild set a price target of $10.00 on SNAP — a level the stock hasn’t seen in some time given its year-to-date decline of nearly 30%.
The firm pointed to improving fundamentals as the reason for the call. That includes an expected move to GAAP profitability this year, a stronger core advertising business, and growing subscription revenue.
Better ad products and features were described as a “specs-driven lift” to the business. Subscription momentum was highlighted as a sign of more predictable revenue going forward.
Snap reported Q4 revenue of $1.72 billion, up 10.2% year-over-year and slightly ahead of the $1.70 billion analyst estimate.
Earnings Miss Clouds the Picture
On the bottom line, Snap posted EPS of $0.03 for the quarter — missing the consensus estimate of $0.15 by $0.12.
The company carries a negative return on equity of 20.72% and a negative net margin of 7.76%. Analysts on average expect full-year EPS of -$0.12 for fiscal 2025.
The stock’s 50-day moving average sits at $4.98, while the 200-day moving average is $6.67.
Despite Monday’s jump, the broader analyst picture is cautious. Of 30 analysts covering the stock, one rates it a Strong Buy, six a Buy, twenty a Hold, and three a Sell. The average price target is $8.08.
Guggenheim and Rosenblatt both reiterated Neutral ratings in mid-April with targets of $6.50 and $6.40 respectively.
Insider Selling Continues
Insiders have been reducing their positions. CAO Rebecca Morrow sold 16,499 shares at $4.70 in February, representing a 3.41% reduction in her stake.
Insider Ajit Mohan sold 119,339 shares at the same price, a 2.26% cut to his position.
In total, insiders offloaded 2,565,573 shares worth approximately $13.33 million in the last quarter.
Institutional investors hold 47.52% of the stock. Several smaller funds added to positions in Q3 and Q4 of last year, though in modest amounts.
Snap’s market cap sits at approximately $9.54 billion, with a debt-to-equity ratio of 1.53 and a current ratio of 3.56.
The most recent analyst note before Monday’s upgrade came from Mizuho in February, which cut its price target from $9.00 to $7.00 while keeping a Neutral rating.
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