Durable Goods (Jun F) -9.4% vs 9.3% Prior, Ex-Trans 0.2% vs 0.2%
On Wednesday, Snap Inc . (NYSE: NYSE:SNAP) received a reaffirmed Market Outperform rating and a steady price target of $16.00 from JMP Securities. The decision came after Snap reported fourth-quarter earnings for 2024 that surpassed expectations, with revenue slightly over 1% above consensus and EBITDA $16 million higher than the top end of the company’s guidance. Currently trading at $11.60, InvestingPro analysis suggests the stock is slightly undervalued, with analysts forecasting a return to profitability in 2024 with projected earnings of $0.27 per share. Snap’s guidance for the first quarter of 2025 was also about 1% higher than consensus estimates, signaling continued momentum in direct response.
Snap’s recent financial performance reflects a positive trend in advertising revenue, particularly from Sponsored Snaps and the company’s growing small and medium-sized business (SMB) segment, which significantly contributed to ad revenue growth in 2024. With a robust revenue growth of 13.66% and an impressive gross profit margin of 53.09%, the company has demonstrated strong fundamentals. JMP Securities noted Snap’s increased investments in headcount and infrastructure planned for 2025 but expressed confidence in the company’s ability to monetize its offerings and improve user engagement.
The research firm’s outlook is buoyed by the potential of the new Simple Snapchat feature to enhance user engagement along with sustained momentum in Snap’s advertising products. These factors underpin JMP Securities’ decision to maintain their Market Outperform rating and $16 price target on Snap stock. For deeper insights into Snap’s valuation and growth potential, including exclusive financial health scores and additional ProTips, check out the comprehensive research report available on InvestingPro.
Snap’s strategic moves and product innovations appear to be translating into tangible financial results, as evidenced by the company’s recent performance and forward guidance. The endorsement from JMP Securities suggests that Snap is positioned to continue its growth trajectory in the advertising space.
In other recent news, Snap Inc has been the focus of several analyst actions. BofA Securities raised the price target for Snap to $14.50, citing a positive trend in revenue generation from Direct Response advertising and the Snapchat+ subscription service. However, the firm maintained a neutral stance due to concerns over user growth stagnation and increasing expenses such as Share-Based Compensation. Goldman Sachs also held a neutral rating on Snap, with a $13.50 price target, acknowledging strong revenue performance and a promising Q1 outlook. Meanwhile, JMP Securities reiterated a Market Outperform rating with a $16.00 price target, highlighting improvements in Snapchat’s direct response performance.
Snap and Reddit have also been offering discounts to attract advertisers amid uncertainties surrounding TikTok’s future. Snap is providing a 20% return in free ad expenditure to advertisers who spend over $100,000 on their platform. On the other hand, Reddit is offering a 10% return in ad credits for brands that spend between $150,000 and $1 million.
The U.S. Supreme Court has ruled that TikTok must be sold by its Chinese parent company, ByteDance, or face a ban in the United States. This ruling presents potential opportunities for other social media platforms like Snap and Reddit to attract advertisers and users from TikTok. These are some of the recent developments in the social media industry.
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