The parent company of Snapchat just got hit with another “sell” rating.
With the company’s IPO in the rear view, MoffettNathanson said it initiated coverage on Snap as “sell” Thursday, saying the market has now priced the company for perfection.
Snap shares were down 0.1 percent on Thursday in premarket trading.
“As a result, we believe its current valuation ‘bubble’ at 7X 202 EV/revenue is set up more for a [Twitter] like pop over the next year than a steady rise from today’s levels,” analyst Michael Nathanson said in a note to investors, giving the company a target price of $15.
The firm cited risks such as slowing DAU growth, limited revenue and profitability. “SNAP’s income statement is going to look a lot more like [Twitter] than [Facebook],” Nathanson said.
Snap has raised some eyebrows on Wall Street, with analysts flagging the company’s slowing user growth, widening losses and lack of voting rights for outside investors.
Snap: 6 ‘sells’, 3 ‘holds’
Needham – Underperform (Sell)
Atlantic Equities – Underweight (Sell)
Morningstar – (Sell)
Aegis – (Hold)
Susquehanna – (Hold)
Nomura Instinet – Reduce (Sell)
Pivotal Research – (Sell)
CFRA Research – (Hold)
FBN Securities – Sector Perform
Cantor – Underweight
MoffettNathanson – (Sell)
—Reuters contributed to this report.