Markets Insider
- Snap is down more than 7% Tuesday after Cowen analyst John Blackledge found Snapchat’s usership is slipping.
- A note from Deutsche Bank out earlier this month found the opposite trend.
- Shares have been rallying since short seller Andrew Left turned positive at the end of May.
- Watch Snap trade in real time here.
Snap shares are plummeting, down as much as 10% Tuesday, after Cowen analyst John Blackledge said a survey showed Snapchat usership is lower than he previously expected.
Cowen’s survey found Snapchat users spent 7% less time on the app (33 minutes per day) than they did a year ago. Blackledge’s daily average user estimate is now 194 million, down from 196 million. That caused him to cut his revenue forecast for the second-quarter to $248 million from $262 million.
“We trimmed our second-quarter 2018, fiscal year 2018-2023 estimates, lowering our revenue / EBITDA forecast on slightly lower Daily Active Users (DAUs) and advertising average revenue per user,” Blackledge, who lowered his price target to $9 from $10, said in a note out to clients Tuesday,
Cowen’s note is in stark contrast a Deutsche Bank note out earlier this month in which analyst Lloyd Walmsley said his data showed Snap’s user growth was increasing.
“Snap’s user growth looks robust in May,” Walmsley wrote at the time. “We think it is plausible that the redesign of the redesign is getting traction across all geographies and ultimately has been helping sequential user growth in second-quarter 2018.”
Tuesday’s selling has ended a strong run for Snap shares, which had gained more than 30% since May 29. The rally was propelled by short seller Andrew Left suggesting the company was a takeover target and that it was “one stabilizing quarter from giving investors a 30% or more return — more than you can see in any FANG stock in our opinion.”
Snap is down 13.42% this year.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
