Sure, Snap had a disappointing quarter — to say the least. But does one bad quarter equal a single-digit stock price?
Brian Wieser thinks it should. After Snap reported Wednesday that it missed Wall Street’s expectations for revenue, earnings and daily active user growth, Wieser, an analyst who covers the company for Pivotal Research Group, dropped his target price for Snap’s stock to $9 a share and reiterated his sell rating on it.
With the Snapchat provider’s sales coming in light, Wieser revised down his long-term revenue outlook for the company and, in turn, his price target.
While Snap’s revenue drop was “consistent with the company’s prior guidance,” he wrote, it “nonetheless represents a surprising element of seasonality in the business, and risks of less growth ahead than we previously expected.”
The single digit price target, though just one analyst’s opinion, is an embarrassing snub for the popular internet company which made its high-profile Wall Street debut just a few months ago.
The company’s shares got shellacked in after-hours trading Wednesday after Snap announced its results, falling more than 23% to approach their $17 March IPO price. But a drop down to Wieser’s target would mark an even more marked decline.
Wieser’s bearishness on the stock isn’t unexpected. His previous price target? $10 a share.
Get the latest Snap stock price here.