By Sam Boughedda
Investing.com — Shares of Snap Inc (NYSE:SNAP) are down more than 8% Monday after Wedbush downgraded the stock to neutral from outperform.
Analyst Ygal Arounian also lowered the price target on the social media company's shares to $36 from $56.
Arounian cited increased competition from TikTok and Identifier for Advertisers (IDFA) as two reasons for the re-rating.
“In our view we've seen little evidence of progress against IDFA since Snap reported 3Q earnings, with our checks indicating continued headwinds across digital advertising," the analyst said.
"While that is the biggest near and potentially mid-term impact to Snap's ability to get back to 50% plus revenue growth, competitive factors are increasing as well, particularly from TikTok, which leaves us more cautious on a risk/reward basis, particularly in an environment where high growth risk multiples are under duress."
Arounian explained that Snap still has a strong foothold amongst the younger demographic and is well-positioned in augmented reality, which Wedbush feels has "great value" for advertisers. In addition, the analyst feels the company has an opportunity to make more money from the Discover, Maps and Spotlight features.
Last week, Snap's price target was lowered to $60 from $65 by Morgan Stanley.