Snap (NYSE:SNAP) Trading Down 8.1% on Analyst Downgrade

Snap Inc. (NYSE:SNAP)’s stock price was down 8.1% during mid-day trading on Wednesday after Zacks Research downgraded the stock from a hold rating to a strong sell rating. The stock traded as low as $5.31 and last traded at $5.32. Approximately 33,843,688 shares traded hands during trading, a decline of 30% from the average session volume of 48,659,684 shares. The stock had previously closed at $5.79.

A number of other equities research analysts also recently commented on SNAP. KeyCorp upgraded Snap from a “sector weight” rating to an “overweight” rating in a research report on Monday, April 27th. JPMorgan Chase & Co. lowered their target price on Snap from $7.00 to $6.00 and set an “underweight” rating for the company in a research report on Thursday, May 7th. Freedom Capital lowered shares of Snap from a “strong-buy” rating to a “hold” rating in a report on Tuesday, May 12th. Canaccord Genuity Group dropped their price target on Snap from $7.00 to $6.00 and set a “hold” rating for the company in a research report on Tuesday, April 14th. Finally, Royal Bank Of Canada lowered their price objective on Snap from $10.00 to $8.00 and set a “sector perform” rating for the company in a research note on Thursday, May 7th. One analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, twenty-four have given a Hold rating and three have issued a Sell rating to the company’s stock. Based on data from MarketBeat, the stock has an average rating of “Hold” and a consensus price target of $7.65.

Insider Activity at Snap

In other Snap news, CTO Robert C. Murphy sold 343,945 shares of Snap stock in a transaction dated Friday, May 29th. The stock was sold at an average price of $5.88, for a total value of $2,022,396.60. Following the transaction, the chief technology officer owned 4,963,581 shares in the company, valued at $29,185,856.28. The trade was a 6.48% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, CFO Douglas Hott sold 114,702 shares of the stock in a transaction that occurred on Tuesday, May 19th. The shares were sold at an average price of $5.67, for a total transaction of $650,360.34. Following the sale, the chief financial officer directly owned 2,456,447 shares of the company’s stock, valued at $13,928,054.49. The trade was a 4.46% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 2,868,059 shares of company stock valued at $15,855,631 over the last 90 days.

Trending Headlines about Snap

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Q2 results and outlook beat expectations. Snap reported $1.60 billion in revenue, up 18.9% year over year and above the $1.54 billion consensus estimate. Its adjusted EBITDA reportedly surged 505%, while the $0.10 per-share loss was narrower than expected. Management also pointed to improving advertising demand, subscription growth, AI tools and positive free cash flow. Snap second quarter results lifted by improving advertising trends
• Positive Sentiment: Advertising momentum and the third-quarter forecast support the bull case. Higher spending from large North American advertisers and FIFA World Cup-related demand helped Q2, while Snap issued an upbeat third-quarter revenue outlook of approximately $1.7 billion. Snap stock jumps as World Cup ads, AI tools drive earnings beat and strong outlook
• Positive Sentiment: Options activity indicates speculative bullish interest. Traders purchased unusually high volumes of Snap call options, suggesting some investors are positioning for additional upside. Stock Traders Buy High Volume of Snap Call Options
• Neutral Sentiment: Analyst actions remain mixed. Wells Fargo, Citi and Cantor Fitzgerald raised their price targets, while Truist and Rosenblatt lowered theirs; most retained neutral, hold or equal-weight ratings. The revisions imply moderate potential upside but limited conviction.
• Neutral Sentiment: Acquisition speculation is not actionable. A commentary article discussed potential buyers if Snap’s founders ever sell, but it acknowledged that no deal or takeover discussions have been announced. Who Might Buy Snap If Its Founders Ever Decide to Sell
• Negative Sentiment: Zacks downgraded Snap from “hold” to “strong sell.” The unusually bearish call is weighing on sentiment despite the earnings beat and reinforces concerns about Snap’s profitability, competition and ability to sustain advertising momentum. Snap downgraded by Zacks Research
• Negative Sentiment: Execution risks remain. CEO Evan Spiegel did not provide details on pre-orders for the upcoming Specs smart glasses, leaving uncertainty around demand and the potential costs of the September launch. Snap CEO sidesteps Specs pre-order questions

Institutional Trading of Snap

Several institutional investors have recently modified their holdings of SNAP. Mackenzie Financial Corp lifted its stake in Snap by 5.1% in the 3rd quarter. Mackenzie Financial Corp now owns 27,638 shares of the company’s stock valued at $213,000 after buying an additional 1,349 shares in the last quarter. WealthCollab LLC lifted its holdings in Snap by 1.2% in the 4th quarter. WealthCollab LLC now owns 115,390 shares of the company’s stock valued at $931,000 after purchasing an additional 1,369 shares in the last quarter. Alliancebernstein L.P. grew its holdings in shares of Snap by 0.3% during the third quarter. Alliancebernstein L.P. now owns 414,416 shares of the company’s stock worth $3,195,000 after buying an additional 1,396 shares in the last quarter. Orion Porfolio Solutions LLC raised its position in shares of Snap by 8.3% in the second quarter. Orion Porfolio Solutions LLC now owns 18,913 shares of the company’s stock valued at $164,000 after buying an additional 1,451 shares during the last quarter. Finally, Newbridge Financial Services Group Inc. boosted its position in Snap by 37.5% during the fourth quarter. Newbridge Financial Services Group Inc. now owns 5,500 shares of the company’s stock worth $44,000 after acquiring an additional 1,500 shares during the last quarter. Institutional investors and hedge funds own 47.52% of the company’s stock.

Snap Stock Performance

The company has a current ratio of 3.53, a quick ratio of 3.53 and a debt-to-equity ratio of 1.67. The stock’s fifty day simple moving average is $4.96 and its 200 day simple moving average is $5.33. The company has a market cap of $8.82 billion, a price-to-earnings ratio of -21.73 and a beta of 1.03.

Snap (NYSE:SNAP) last issued its earnings results on Monday, August 3rd. The company reported ($0.10) earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.12) by $0.02. Snap had a negative return on equity of 14.16% and a negative net margin of 4.90%.The business had revenue of $1.60 billion during the quarter, compared to the consensus estimate of $1.54 billion. During the same period last year, the company earned ($0.16) EPS. The company’s revenue for the quarter was up 18.9% on a year-over-year basis. As a group, analysts anticipate that Snap Inc. will post -0.07 earnings per share for the current year.

About Snap

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.