Snap Inc Receives a Sell from Cantor Fitzgerald

By Austin Angelo

Snap Inc (NASDAQ: SNAP) received a Sell rating and a $18 price target from Cantor Fitzgerald analyst Youssef Squali today. The company’s shares opened today at $20.90, close to its 52-week low of $20.24.

Squali said:

“The (valuation) numbers do not add up. Our revenue and profitability growth estimates are aggressive and assume a ramp in revenues over the next 5 years that’s similar to what we saw with Facebook, which would be impressive. On that basis, SNAP trades at 28.6x EV/revenue using our FY17 estimates (EV/ EBITDA is not meaningful) vs. the average of the peer group of 5.5x (and 9.6x for FB). At IPO, FB was priced at ~20x EV/Forward Revs. Using our FY18 estimates, SNAP trades at 13.9x EV/revenue vs. the average of the peer group at 4.5x (7.3x for FB).”

According to TipRanks.com, Squali is a top 100 analyst with an average return of 12.2% and a 69.5% success rate. Squali covers the Technology sector, focusing on stocks such as TripAdvisor Inc, Rubicon Project, and Leaf Group Ltd.

Currently, the analyst consensus on Snap Inc is Moderate Sell and the average price target is $17.56, representing a -16.0% downside.

In a report issued on March 2, Pivotal Research also initiated coverage with a Sell rating on the stock with a $10 price target.

The company has a one year high of $29.44 and a one year low of $20.24. Currently, Snap Inc has an average volume of 77.93M.

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Snap, Inc. develops a text and photo based messaging application for mobile phones. Its platform enables users to share photos with friends and control how long they can view their message. The company was founded by Frank Reginald Brown IV, Evan Thomas Spiegel, and Robert C. Murphy in July 2011 and is headquartered in Venice, CA.