TLDR
- Redburn upgraded Snap to “Buy” and doubled its price target to $10
- Analysts expect Snapchat+ subscription revenue to more than double to $1.75B in three years
- Snap is seen as on track for GAAP profitability in 2026
- AI-driven cost cuts expected to push gross margins above 60%
- SNAP is still down ~25% year-to-date and trading 41% below its 52-week high
Snap (SNAP) stock climbed around 7-8% on Monday after Redburn upgraded the stock to “Buy” and doubled its price target from $5 to $10.
That $10 target implies roughly 65% upside from where SNAP was trading before the move.
The upgrade was not just a vote of confidence — it came with a detailed thesis on why the firm thinks Snap is turning a corner.
Redburn’s call centers on Snap’s shift away from being a pure advertising play. While digital ads are still the main revenue driver, analysts flagged the fast-growing Snapchat+ subscription service as the real reason to get excited.
The firm expects subscription revenue to more than double over the next three years, rising from around $700 million to $1.75 billion. That would take its share of total revenue from 13% to 22%.
That kind of recurring, predictable revenue is a meaningful shift for a company that has long been at the mercy of the digital ad market’s ups and downs.
Profitability in Sight
Redburn also pointed to cost discipline as a key part of the bull case. Snap is believed to have reached breakeven on a GAAP basis last year — excluding its Spectacles hardware experiments — and analysts think it is on course to become “meaningfully profitable” in 2026.
That would be a milestone for a company that has struggled to turn a profit since going public in 2017.
Aggressive job cuts and a broader move toward an AI-enabled operating model are expected to push gross margins above 60%. Redburn framed this as Snap finally maturing into a leaner, profit-focused business.
Monday’s move pushed SNAP to challenge its 100-day moving average. Analysts noted that a decisive break above $6.20 would signal a shift in longer-term momentum toward the bulls.
The stock also briefly cleared key technical levels, drawing attention from traders watching for a trend reversal.
Where the Stock Stands
Despite the rally, Snap is still down about 25% year-to-date and trades roughly 41% below its 52-week high of $10.35 hit in July 2025.
Someone who put $1,000 into SNAP five years ago would have about $100 today.
The broader analyst community is more measured than Redburn. The Wall Street consensus rating sits at “Hold,” though the average price target of around $7.99 still implies more than 30% upside from current levels.
SNAP has made moves greater than 5% on 26 separate occasions over the past year, so volatility is par for the course here.
The Redburn upgrade is the most bullish call on the stock in recent memory, but it is not yet a view shared widely across the Street.
🚨 Our April Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for April, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
