Rosenblatt raises Snap stock target to $12, keeps neutral stance

On Wednesday, Rosenblatt Securities adjusted its price target for Snap Inc (NYSE: NYSE:SNAP), moving it to $12 from the previous $11, while keeping a Neutral rating on the company’s shares. The firm’s analysts cited Snap’s fourth-quarter 2024 performance, which aligned closely with their projections, and noted the company’s ongoing efforts to shift from brand to performance marketing. Additionally, the Snapchat+ subscription service was recognized for contributing positively to the company’s strategy. According to InvestingPro data, Snap’s stock is currently trading at $11.6, with analyst targets ranging from $9 to $17, suggesting potential upside from current levels. InvestingPro analysis indicates the stock is currently undervalued based on its proprietary Fair Value model.

Snap’s guidance fell slightly short of Rosenblatt’s expectations but was in line with the general consensus. The analysts at Rosenblatt acknowledged the company’s diligent work in transforming its marketing approach, an initiative that appears to be yielding success. Despite a minor reduction in forward estimates, the price target was increased due to a forward-looking assumption of a 25 times price-to-earnings (P/E) ratio based on the anticipated 2026 adjusted earnings per share (EPS). While InvestingPro data shows the company isn’t currently profitable, with a -$0.58 EPS over the last twelve months, analysts predict profitability this year with an EPS forecast of $0.27 for 2024.

The adjustment in the price target reflects a balance of factors, including the modest revision of future earnings expectations and the application of a P/E multiple to the year ahead. Rosenblatt’s stance remains neutral, suggesting that while they acknowledge the company’s positive steps, they are waiting for more substantial evidence of growth and profitability before altering their rating.

The transition to performance marketing is a strategic move for Snap as it aims to attract advertisers by demonstrating direct returns on investment from their advertising spend. The Snapchat+ subscription service adds another dimension to the company’s revenue streams, potentially stabilizing income as Snap diversifies its business model. InvestingPro reveals strong revenue growth of 13.66% over the last twelve months, with the company maintaining a healthy gross profit margin of 53%. For deeper insights into Snap’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Snap Inc’s stock price will continue to be influenced by the company’s ability to execute its strategic initiatives effectively and deliver financial results that meet or exceed market expectations. Investors and market watchers will likely monitor Snap’s progress closely as the company navigates the competitive digital advertising landscape.

In other recent news, Snap Inc has been the subject of several analyst reports. Barclays (LON:BARC) analyst Ross Sandler maintained an Overweight rating on Snap with a $16.00 target, citing the company’s robust fourth-quarter performance and efficient cost management. Meanwhile, Morgan Stanley (NYSE:MS) reiterated its Equalweight rating on Snap with a $10.00 target, acknowledging better than expected results but expressing the need for more consistent performance.

Wolfe Research kept their Peer Perform rating on Snap, pointing to decelerating top-line growth and ongoing investments as potential concerns. Stifel analysts also maintained a Hold rating on Snap with an $11.00 target, highlighting mixed results from recent initiatives and anticipating potential challenges to margin improvements.

Lastly, Bernstein analysts led by Mark Shmulik kept a Market Perform rating on Snap with a $12.00 target, discussing the potential impact of a TikTok ban on the social media sector. These recent developments reflect a range of perspectives on Snap’s current performance and potential future trajectory.

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