Reuters
- Snapchat’s parent company, Snap Inc., will increase 45% as product development drives faster-than-expected revenue growth, Goldman Sachs said in a note on Monday.
- Goldman reiterated its purchase rating for Snap shares and set a price target of $ 70 for the company.
- Goldman’s note helped to stage an 11% rise in Snap’s shares in Tuesday’s trading.
- Watch the Snap trade live here.
Snapchat’s parent company, Snap Inc., has a lot of room for improvement if a Goldman Sachs analysis turns out to be correct.
In a note on Monday, Goldman reiterated its purchase rating on Snap and set a target price of $ 70, representing a 45% upside potential compared to Monday’s close.
The note helped boost Snap’s shares by up to 11% in Tuesday’s trading.
Goldman believes that recent Snap initiatives, including a range of technological innovations and product partnerships, combined with a favorable macro scenario for online advertising, “will increase the likelihood of accelerating revenue growth far beyond consensus predictions in the fourth quarter and beyond “, according to the note.
Snap is expanding its advertiser base and user engagement on its sharing platform continues to grow, Goldman noted.
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“Snap’s Spotlight product, new advertising campaign goals and bid types, and the partnership with Unity, have the potential to further drive engagement growth, as well as provide valuable scale for advertisers,” said Goldman.
In addition, Goldman’s channel checks suggest that Snap will be able to beat its own growth forecasts.
“Our checks with advertisers, along with recent data from third-party apps, suggest that the brand and strength of direct response continued into the holiday season, despite the uncertainty surrounding the impact of the November elections and the resurgence of COVID-related blockages. , leading to a high potential for the 47% -50% pa growth that management noted would be possible if the holiday season materialized in line with previous years, “explained Goldman.
“We now expect revenue growth of 58% y / y, reflecting this strength,” added Goldman.
Snap shares were up 196% YTD through Thursday’s close.
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