Snapchat Finally Got Its First Buy Rating. Then Its Stock Surged
Most of Wall Street has given Snap a thumbs-down following its IPO earlier this month. But one analyst has finally given a stamp of approval to the as-of-yet-unprofitable parent of Snapchat
Monness Crespi Hardt analyst James Cakmak gave Snap a “Buy” rating on Monday, effectively saying that he expects the stock to beat the market by 10% or more over the next six to 12 months. That forecast helped lift shares, which jumped almost 4% during midday trading before closing up 2%.
It was high praise in comparison to other Wall Street analysts, who have thus far given Snap either a “Sell” or a “Hold.” And that bearish sentiment has also settled into the markets, with Snap shares down about 20% since their IPO closing price, significantly underperforming the markets generally. But Cakmak expects Snap to hit $ 25 over the next few months. He argues that Snapchat’s flagging daily usage may look like a red flag to investors, but that Snap isn’t a typical social media company, and is instead trying to break into the camera space.
“There has been little innovation in cameras since the invention of the digital camera by Eastman Kodak back in 1975, save pixel quality,” Cakmak wrote. “Future innovation will come in part through hardware (like circular video in the case of Spectacles), but more so through software, in our view.”
