Proactive Investors - Snap has earned a repeat ‘Perform’ rating from Oppenheimer analysts after reporting first-quarter results that failed to impress investors, sending the stock tumbling by almost 20% on Friday.
Snap’s revenue of $989 million fell short of Wall Street’s expectation of $1.01 billion, while earnings per share of $0.01 narrowly beat forecasts of a loss per share of $0.01.
Oppenheimer’s analysts wrote in a note to clients that they were maintaining their ‘Perform’ rating on the stock as Snap remains heavily reliant on brand advertising amid continued steep competition from TikTok, Reelz, and YouTube shorts.
“Despite reaching $500 million in annualized cost savings, increases in cloud infrastructure and go-to-market efforts for advertising will significantly impact profitability,” the analysts wrote.
“Furthermore, investors will now worry Snap has too many initiatives to execute effectively between ad businesses turnaround.”
The analysts did not award a price target for the stock. Snap shares were down 18.7% at US$8.53 on Friday afternoon.