Citizens maintains Snap stock rating as user engagement declines

Investing.com - Citizens has reiterated its Market Perform rating on Snap Inc (NYSE:SNAP), which has seen its stock decline nearly 9% in the past week and 28% year-to-date, as the social media company continues to face challenges with user engagement metrics. According to InvestingPro data, Snap maintains a healthy current ratio of 3.88, indicating strong short-term financial stability.

The research firm noted that Snapchat’s U.S. time spent declined approximately 14% year-over-year, while global time spent fell 4.7% year-over-year, showing only a slight improvement from the 5.0% decline observed in August.

Despite these engagement challenges, Snap’s global monthly active user (MAU) growth remains relatively healthy at approximately 5% year-over-year, according to Citizens’ analysis.

The firm highlighted that U.S. monthly active users have now declined for 22 consecutive months, indicating persistent challenges in Snap’s home market.

Citizens believes that while Snapchat’s global messaging platform remains healthy, user time spent is transitioning to other short-form video products, resulting in continued decline in time spent per monthly active user.

In other recent news, Snap Inc . has been the focus of several noteworthy developments. Guggenheim maintained its Neutral rating for Snap, setting an $8.00 price target, while forecasting a 4.6% growth in third-quarter advertising revenue despite ongoing pricing challenges. Mizuho also initiated coverage of Snap with a Neutral rating and a $9.00 price target, highlighting potential growth but expressing caution due to weak feedback from advertising channels. In addition to these analyst activities, Snap has introduced new paid storage options for users exceeding a 5GB limit on their Memories feature, affecting those who save large amounts of content. Furthermore, the Federal Trade Commission has launched an inquiry into Snap and other tech companies regarding the impact of AI chatbots on children, seeking information on safety measures for young users. Meanwhile, Bit Digital Inc. announced a $100 million convertible senior notes offering, with notes due in 2030, which led to a notable drop in its stock price. These events collectively highlight the dynamic environment in which Snap and other tech companies are operating.

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