Instinet Starts Snap Inc (SNAP) at Reduce
Instinet initiates coverage on Snap Inc (NYSE: SNAP) with a Reduce rating and a price target of $16.00.
Analyst Anthony DiClemente commented, "Snap Inc. is becoming a public company just as its user growth and monetization growth rates are beginning to meaningfully slow. We believe that upside in shares is limited by 1) already slowing growth in daily active users (DAUs); 2) slowing monetization (ARPU) growth; 3) fierce competition from larger rivals such as Facebook, Instagram, and WhatsApp; and 4) rich valuation relative to current and future growth. We see Snap’s revenue opportunity as constrained relative to expectations and, as such, we think shares are fairly valued at best at the IPO price. We initiate with a Reduce rating and $16 target price, based on an already lofty 11x EV/sales multiple which we apply to our 2018 estimates."
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Shares of Snap Inc closed at $0.14 yesterday.