Joby Aviation closes $591 million stock offering with full underwriter option
Investing.com - Guggenheim has reduced its price target on Snap Inc (NYSE:SNAP) to $8.00 from $9.00 while maintaining a Neutral rating, citing mixed second-quarter results and slowing growth trends. Currently trading at $9.39, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $7 to $16. The company maintains a FAIR financial health score, with particularly strong liquidity metrics.
The social media company reported second-quarter advertising revenue growth of 3.8%, down from 9.3% in the first quarter, with Direct Response (DR) advertising showing a significant deceleration. The growth was primarily driven by the small and medium-sized business segment, while brand advertising trends showed modest improvement. According to InvestingPro data, Snap’s overall revenue growth remains positive at 14.91% over the last twelve months, with the company maintaining a healthy current ratio of 4.3. Get access to 6 more exclusive InvestingPro Tips and comprehensive financial metrics to make better-informed investment decisions.
Snap faced several advertising headwinds during the quarter, including a platform pricing issue that primarily impacted DR in April, the timing shift of Ramadan, and a de minimis exemption. Revenue trends fluctuated throughout the quarter, improving from 1% in April to high single digits in May before reverting to 3-4% in June with the roll-out of Sponsored Snaps. Despite these challenges, InvestingPro analysts expect net income growth this year, with the company maintaining moderate debt levels and strong liquid assets.
The company is currently experiencing advertising revenue growth of 3-4% at the start of the third quarter, with guidance suggesting modest improvement despite facing tough comparisons due to the Olympics. Impression growth benefited from increased Spotlight engagement, while average eCPM (effective cost per thousand impressions) softened due to platform issues and higher impressions from lower monetizable ad formats.
Guggenheim cited slowing Direct Response growth and continued North America daily active user (DAU) declines as key concerns, despite the company’s return to providing guidance, which reflects increased confidence in macro-related visibility.
In other recent news, Snap Inc reported mixed second-quarter results, with revenue approximately meeting expectations but without providing guidance for the quarter. The company faced challenges such as Ramadan, the expiration of the de minimis exception, and complications with a new auction dynamic that led to significantly reduced pricing. In response to these developments, several analyst firms have adjusted their price targets for Snap. Rosenblatt Securities lowered its price target to $8.70, citing an "odd mishap" in the ad auction system. Stifel maintained its Hold rating with an $8.00 price target, reflecting the mixed results. Wells Fargo (NYSE:WFC) reduced its price target to $7.00 due to weaker-than-expected second-quarter trends and third-quarter guidance, which led to a reduction in ad revenue forecasts for 2025 and 2026. UBS also lowered its price target to $9.00, expressing concerns about advertising revenue growth. In contrast, Evercore ISI raised its price target to $12.00, attributing the increase to a revised valuation framework despite "surprisingly soft" results.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.