Benchmark Reiterates Hold Rating on Snap Inc (SNAP)

Benchmark analyst Mark Zgutowicz reiterated a Hold rating and {REMOVEPT} price target on Snap Inc (NYSE: SNAP).

The analyst commented, "Snap’s pivot to profitability via cuts to community growth marketing and infrastructure delivered 4Q GAAP profit but disappointed on DAUs as North America (NA) lost 3.3M users q/q, easily the steepest seq. drop on record. Net-net, NA ARPU growth accelerated, DAUs decelerated, producing flat (2yr stack) revenue growth. 4Q revenue was driven primarily by DR and secondarily, SMB demand, while NA large client brand spend remained a weak point that management intends to fix with new sales leadership. While management’s ’26 North Star is Ad Revenue momentum –leveraging Sponsored Snaps and Promoted Places plus continued SMB progression– it may take some time to calibrate its new “cost-to-serve by geo” strategy to avoid future DAU downward momentum, particularly in its most profitable NA region. Management’s prudent counterbalance here is the launch of new subscription offerings including “Memories storage” (Sep. ’25) which meaningful boosted 4Q Snapchat+ sub growth, up +7M(!) q/q. On the flip side, if we exclude est. NA Snapchat+ revenue, ‘25E NA ARPU growth was just +2.3% y/y (vs. 10.1% reported), pointing to our long-standing concern on Snap’s ability to deliver competitive relative DR ROAS. Separately, the Perplexity integration has been put on hold as terms of the partnership are still being negotiated and so our forecast continues to exclude respective projections here. We maintain our Hold rating."

For an analyst ratings summary and ratings history on Snap Inc click here. For more ratings news on Snap Inc click here.

Shares of Snap Inc closed at $5.91 yesterday.

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