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The Snapchat mobile app logo.
Lionel Bonaventure / AFP via Getty Images
Snap
shares jumped more than 5% on Tuesday, after Goldman Sachs raised the target price and said Snapchat’s father is likely to exceed its own fourth-quarter guidelines.
Shares of Snap (ticker: SNAP) advanced 5.8%, to $ 51.05, in the afternoon trading.
On a positive note, Goldman Sachs analyst Heath Terry set a $ 70 price target on the shares, above $ 47, justifying an implicit 45% rise in technology improvements and partnerships. that the company has announced since its third quarter results.
Based on third-party app data research, Terry’s team has concluded that Snap’s direct response announcements have remained strong through recent Covid-19-related blockchains and will contribute 8 percentage points above consensus estimates for fourth-quarter growth.
For the fourth quarter, analysts surveyed by FactSet expect sales of $ 844 million, up 51%.
The rest of Wall Street is definitely not as excited about Snap’s actions as Terry. Analysts have an average target price of $ 42.12, implying an approximate 17% disadvantage for stocks. Of the analysts who follow the company, 67% rate the purchase and 26% rate the Hold name. Only three analysts, or 8% of the 39 who cover it, have a sales rating.
Looking beyond the fourth quarter, Terry predicted that demand for online inventory advertisers would continue to grow — also benefiting other social media stocks — as viewers decline and the economy recovers. damage caused by coronavirus-related blockages.
And as demand for ads increases, Snap’s advertising tools continue to improve. Terry wrote that Snap’s efforts to provide advertisers with more information about the performance of their ads, including making an adjustment to a tool that helps customers optimize advertising spending, will help customers get more value from every dollar spent on the platform. Snap should pick up more ad customers or a larger share of the expense of existing ad buyers, if they can continue to demonstrate the advantage in using their tools.
Terry also highlighted Snap’s collaboration with
Unity software
(U), the maker of video game developer tools, that will allow advertisers to place ads on games.
Unity has a large inventory and has more than two billion monthly active end users, Terry noted. Thanks to collaboration, advertisers using Snap tools can now target this broad user base, significantly increasing the size and availability of ad inventory that Snap can sell. The agreement also includes offering developers using the Unity platform access to Snap technology that makes it easy to log in to games and applications.
Rapid stocks have had a strong year, rising by around 200%, as a benchmark
S&P 500
the index rose 16%. He
Nasdaq Composite
the index rose 45% in 2020.
Write to Max A. Cherney to [email protected]