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Investing.com - Rosenblatt Securities reduced its price target on Snap Inc (NYSE:SNAP) to $8.70 from $9.00 on Wednesday, while maintaining its Neutral rating on the social media company’s stock. Currently trading at $9.39, Snap maintains a market capitalization of $15.8 billion, with analyst targets ranging from $7 to $16 per share. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value assessment.
The price target adjustment follows what Rosenblatt described as an "odd mishap" in Snap’s second quarter of 2025, when an update to the company’s ad auction system caused it to mistakenly auction advertising inventory in April at a substantial, unintended discount. Despite these challenges, InvestingPro data shows the company maintains strong liquidity with a current ratio of 4.3, operating with moderate debt levels.
This technical error stalled Snap’s advertising growth at just 1% during the affected period, before the issue was fixed and ad growth recovered to approximately 4% for the full second quarter.
Even at this recovered pace, which is expected to continue into the third quarter, Snap’s advertising growth remains significantly below the 9% increase recorded in the first quarter of 2025 and the 10% that Rosenblatt had previously estimated for Q2.
The investment firm cited the slower advertising growth rate and lighter-than-expected adjusted EBITDA as key factors behind its decision to trim estimates and reduce its price target by $0.30.
In other recent news, Snap Inc. reported mixed second-quarter results, with revenue approximately in line with expectations but without providing guidance for the quarter. The company faced challenges such as the end of the de minimis exception and issues with a new auction dynamic that affected pricing. Despite these hurdles, Evercore ISI raised its price target for Snap to $12, citing a rollforward of its valuation framework, even though the results were described as "surprisingly soft." Conversely, Wells Fargo (NYSE:WFC) lowered its price target to $7 due to weaker-than-expected second-quarter trends and reduced ad revenue forecasts for 2025 and 2026. UBS also adjusted its price target to $9, expressing concerns about advertising revenue growth and estimating a lower growth rate for the third quarter of 2025. Stifel maintained a Hold rating with an $8 price target, acknowledging the mixed quarterly performance. Raymond (NSE:RYMD) James retained an Outperform rating and a $10 price target, despite Snap’s revenue falling below expectations, attributing the miss to ad platform execution issues. These developments reflect varied analyst perspectives on Snap’s financial outlook amidst ongoing advertising challenges.
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