Splits of social media company Snap plummeted by as much as 20 percent Wednesday dig disappointing earnings, and Wall Street still sees room on the downside.
The Theatre troupe significantly missed revenue estimates in its latest report and said its next post year-over-year revenue growth rate will “decelerate substantially,” to a limited due to ad prices. The company also missed analysts target for daily efficacious users and revenue per user.
As a result, multiple firms published bearish notes and run down a wandered down their price targets for Snap’s stock.
Morgan Stanley released its price target to $8, about $6 below where the stale closed Tuesday, and remains underweight. Snap was trading at $11.45 on Wednesday morning, down all but 19 percent on the day.
“1Q:18 miss and forward ad commentary speak to continued defies SNAP faces in turning its business model around,” Morgan Stanley analyst Brian Nowak mean in a note to clients Wednesday.
Nowak cited user churn, the bumbled app redesign, poor performance on Androids and advertiser concerns as headwinds look for to continue into the second quarter.
Analysts at Piper Jaffray were “skeptical” after the consequences, projecting an $11.50 price target. It cited leadership and said contest from Instagram could add to the pain.
“Snap is a poorly structured attendance that is demonstrating a clear pattern of mismanagement,” Piper Jaffray analyst Sam Kemp utter in a note to clients. “We think the negative news cycle around Snap longing continue and advertisers will likely continue to approach Snap skeptically.”
Analysts at Deutsche Bank were also bearish, stay a $12 price target with a hold rating.
“Snapchat hazards losing its ‘cool’ status with users frustrated by the redesign, which causes advertisers increasingly unlikely to put money into Snap advertising without get out ROI returns,”
Deutsche Bank’s Lloyd Walmsley said in a note to shoppers Wednesday.
“We think Snap is a ‘show me’ stories to advertisers (and investors), and has to depart fast to change the narrative, particularly given its cash burn positions,” Walmsley said.
Credit Suisse dropped its price target from $21 to $16, still above where the everyday was trading Wednesday. While its analysts called the quarter “conviction-testing,” they persevere ined their outperform rating.
“As shares have already retraced bankrupt almost all of the gains, we elect to maintain our Outperform rating for now given the upside concealed but acknowledge that further patience may be required,” Deutsche Bank’s Stephen Ju replied.