Zacks Research Downgrades Snap (NYSE:SNAP) to Strong Sell

Snap (NYSE:SNAP) was downgraded by analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a note issued to investors on Monday,Zacks.com reports.

Other research analysts have also issued reports about the company. Tigress Financial assumed coverage on Snap in a research report on Monday, April 27th. They issued a “buy” rating on the stock. Cantor Fitzgerald lifted their price target on Snap from $5.00 to $6.00 and gave the company a “neutral” rating in a report on Tuesday. HSBC cut Snap from a “hold” rating to a “hold” rating in a research note on Monday, April 27th. Citizens Jmp restated a “market perform” rating on shares of Snap in a report on Tuesday. Finally, Wall Street Zen lowered shares of Snap from a “buy” rating to a “hold” rating in a research report on Sunday, July 26th. One equities research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, twenty-four have given a Hold rating and three have assigned a Sell rating to the company. According to MarketBeat, the company has an average rating of “Hold” and an average price target of $7.65.

Snap Trading Up 14.3%

NYSE SNAP opened at $5.76 on Monday. Snap has a 1-year low of $3.81 and a 1-year high of $9.55. 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 company has a market capitalization of $9.73 billion, a PE ratio of -24.00 and a beta of 1.03. The firm’s fifty day simple moving average is $4.96 and its 200-day simple moving average is $5.33.

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

Insider Activity at Snap

In other news, CFO Douglas Hott sold 124,209 shares of the company’s stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $5.60, for a total transaction of $695,570.40. Following the completion of the sale, the chief financial officer owned 2,571,149 shares in the company, valued at approximately $14,398,434.40. This represents a 4.61% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CTO Robert C. Murphy sold 2,000,000 shares of the stock in a transaction dated Wednesday, May 13th. The shares were sold at an average price of $5.44, for a total value of $10,880,000.00. Following the transaction, the chief technology officer directly owned 47,012,324 shares in the company, valued at approximately $255,747,042.56. This represents a 4.08% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders sold 2,868,059 shares of company stock valued at $15,855,631.

Institutional Investors Weigh In On Snap

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Mackenzie Financial Corp boosted its position in Snap by 5.1% during the third quarter. Mackenzie Financial Corp now owns 27,638 shares of the company’s stock worth $213,000 after purchasing an additional 1,349 shares during the period. WealthCollab LLC raised its position in shares of Snap by 1.2% in the fourth quarter. WealthCollab LLC now owns 115,390 shares of the company’s stock valued at $931,000 after purchasing an additional 1,369 shares during the period. Alliancebernstein L.P. raised its position in shares of Snap by 0.3% in the third quarter. Alliancebernstein L.P. now owns 414,416 shares of the company’s stock valued at $3,195,000 after purchasing an additional 1,396 shares during the period. Orion Porfolio Solutions LLC lifted its stake 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 worth $164,000 after buying an additional 1,451 shares during the last quarter. Finally, Newbridge Financial Services Group Inc. lifted its stake in shares of Snap by 37.5% in the fourth quarter. Newbridge Financial Services Group Inc. now owns 5,500 shares of the company’s stock worth $44,000 after buying an additional 1,500 shares during the last quarter. 47.52% of the stock is currently owned by institutional investors and hedge funds.

Key Headlines Impacting Snap

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Q2 results exceeded expectations. Snap reported revenue of $1.60 billion, up 18.9% year over year and above the $1.54 billion consensus estimate. Its adjusted loss of $0.10 per share was narrower than the expected $0.12 loss. Snap second quarter results lifted by improving advertising trends
• Positive Sentiment: Advertising momentum and profitability improved. Management cited stronger demand from large North American advertisers, World Cup-related spending, AI tools and subscription growth. Adjusted EBITDA reportedly surged 505%, while the company highlighted margin expansion and positive free cash flow. SNAP’s Q2 Revenues Climb 19% Y/Y, Adjusted EBITDA Surges 505%
• Positive Sentiment: Third-quarter guidance was encouraging. Snap forecast revenue of approximately $1.7 billion, in line with consensus but signaling continued growth and helping reinforce the post-earnings rally. Snap stock jumps as World Cup ads, AI tools drive earnings beat and strong outlook
• Neutral Sentiment: Analyst views remain cautious. Wells Fargo and Citigroup raised their price targets to $6.00 and $6.75, respectively, while Truist and Rosenblatt lowered theirs to $7.00 and $6.00. Ratings largely remain neutral or hold, indicating that much of the near-term optimism may already be reflected in the stock.
• Neutral Sentiment: Technical resistance could limit gains. Snap is approaching a potential resistance level after moving above its 50-day average, although it remains near its 200-day average. Stock Of The Day: Is Snap Breaking Out?
• Negative Sentiment: Losses and execution risks persist. Snap remains unprofitable, and its CEO avoided giving details about pre-order demand for Specs smart glasses ahead of the September launch, leaving investors with limited visibility into the product’s prospects. Snap CEO sidesteps Specs pre-order questions

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.