| March 27
March 27 Snap Inc, owner of messaging
app Snapchat, received top ratings from a number of its IPO
underwriters on Monday, sending its shares up more than 3
percent in premarket trading.
Snap had a red-hot debut on March 1 in what was the largest
listing by a technology firm in three years. However, many
investors have been critical of the company's lack of
profitability and decelerating user growth.
At least six brokerages, including Morgan Stanley and
Goldman Sachs, rated the stock "buy" or higher, citing the
company's long-term growth in a highly competitive market.
As of Friday's close, the stock had risen nearly 34 percent
from its $17 initial public offering price. The stock was
trading at $23.52 before the bell on Monday.
The Los Angeles-based company's app, which allows users to
share short-lived messages and pictures, is popular with young
people but faces intense competition from larger rivals such as
Facebook Inc's Instagram. Snap has warned it may never
"SNAP's engaged/hard-to-reach millennial users and unique
video offerings should attract significant ad dollars," said
Morgan Stanley analysts, who started the stock with an
The analysts also said that Snap's ad monetization was still
in its infancy.
Among other underwriters, Jefferies, RBC, Cowen & Co and
Credit Suisse rated the stock a "buy". RBC was the most bullish
with a $31 price target.
"The big question is whether SNAP's user base can "age up","
analysts at Cowen & Co said in a note.
However, JP Morgan, also an underwriter, started with a
"(The) neutral rating is driven by an increasingly
competitive social media landscape which includes Facebook and
others implementing successful Snap features across a broader
user base, potentially weighing on user growth, and lack of
profit until 2019E," JP Morgan analysts said.
Including the latest actions, Snap now has eight "buy" or
higher ratings, six "sell" and seven "neutral" ratings,
according to Thomson Reuters data.
(Reporting by Rishika Sadam in Bengaluru; Editing by Saumyadeb