Snap: Color on Quarter --> down 22% just undder $18 premarket
- Canccord Genuity: "The urge for investors will be to compare this volatility [after the earnings report] to Facebook's early life as a public company. We do believe there should be a stock recovery as more consistent expectations settle in, but our somewhat cautious thesis remains unchanged: SNAP's user base is very healthy and very engaged, but DAU growth should continue to decelerate, monetization for the platform needs to ramp as fast as they have ever seen (and therefore could be uneven), and formidable headwinds persist in the form of Facebook/Instagram competition."
- Pivotal: Snap reported light 1Q17 earnings, representing a decline in revenues vs. 4Q16, which while consistent with the company's prior guidance, nonetheless represents a surprising element of seasonality in the business, and risks of less growth ahead than we previously expected. We are modifying our model with a new $9 per share price target on a YE2017 basis. THey continue to rate the stock Sell.
- RBC notes TWTR shares collapsed 24% on its first EPS print. So too did SNAP... While Revenue, EBITDA, and DAUs came in in-line with our estimates, Revenue & EBITDA came in 5% & 3% light vs. Street and clearly much lighter vs. "Market expectations." THey would strongly argue against Q1 results being thesis-changing. Way too early. Their estimates are unchanged, and our PT remains $31. Maintain Outperform.
- Stifel lowers tgt to $22 from $24 after nap's first results as a public co fell short of consensus expectations, with the company's lack of quarterly guidance leading to a widely varying range of estimates on both the top- and bottom-lines. Snap also posted fewer DAU additions than investors were looking for, prompting concerns about competition with Facebook and the co's ability to grow users outside of the U.S. Snap's 1Q financials overshadowed healthy trends in engagement, however, with daily Snaps created (3.0B) and time spent (30+ mins) showing impressive gains since their last disclosures. Looking at the bigger picture, Snap operates a nascent advertising business in hyper-growth mode and a cutting edge mobile application that pushes the limits of both devices and cellular networks, leading to a wide variety of potential revenue / user growth outcomes in the near-term. They continue to think Snap has the potential to develop into a durable digital media franchise with considerable upside from its current market cap, but investor skepticism and near-term supply / demand dynamics related to the co's impending lock-up expiration could hold Snap's stock price in check for the time being. They lower our Price Target on Snap shares to $22 and maintain their Hold rating.
- Needham notes their estimates weren't close. SNAP's results were disappointing and suggested several business model problems: 1) Rev was $150mm and costs of rev were $163mm, suggesting negative gross margin; 2) ARPU was $0.90 vs hosting costs alone at $0.60/user; 3) Revenue rose by $111mm y/y, yet Adjusted EBITDA fell by $95mm to a loss of $188mm, suggesting no operating leverage; 4) FCF loss was $173mm, worse than SNAP's 1Q16 FCF loss of $105mm. A bright spot was 8mm users added in 1Q17 (to 166mm), up 5% q/q, and better than the 5mm users added in 4Q16. SNAP gave no guidance. They expect SNAP's shares to open down about 25%, implying a valuation multiple of 30x FY17E revenue. This is still too high, in their view; Underperform.
- Aegis would characterize Snap's first quarter out of the gate as a miss on revenues and essentially in-line user growth. As such, they view the sell-off as warranted. Their concerns on the business and the stock has not changed. They remain concerned with competition from Instagram for both users and advertising dollars - a key risk factor for the business and the stock. They remain cautious of Snap's ability to grow its user base and advertising revenue at a rate significant enough to justify the stock's valuation.
- Cantor Fitzgerald upgrade to Neutral.
- Oppenheimer upgraded to Outperform.