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Social media app Snap (SNAP) +7.36% as revenues jump 66% in Q1
Snapchat parent Snap Inc. (SNAP) closed 7.39% on Friday after its Q1 beats and healthy daily active user numbers prompted analysts to raise price targets.
Snap did come in with a $287m net loss or $0.19 per share loss for the first three months of the year, but this was better than the -$0.26 figure predicted by analysts.
Revenue soared 66% to $770m during the same period to trump the Wall Street consensus by $26m.
The COVID-19 pandemic has helped to drive social media usage in general recently and Snap saw its daily active users jump 22% to 280m versus the 275.4m expectations.
Snap chief executive Evan Spiegel said that it had achieved its “highest year-over-year revenue and daily active user growth rates in over three years during the quarter”.
A milestone first of free positive cash flow was also achieved for the first time since Snap’s blockbuster IPO back in 2017.
Analysts looked favourably on Snap’s latest update, with many opting to increase their respective price targets on Friday.
Morgan Stanley added a single dollar to a $75 PT after citing Snap’s strong returns in terms of revenue users and profitability.
Barclays went from $66 to $75 after noting that Snap is “still in the sweet spot of generating fairly significant revenue growth rates”.
Citigroup was not quite as bullish after standing pat on a sell rating and $40 PT, even though it recognised how well the Santa Monica-based company had performed in Q1.
Loop Capital Markets and Trust Securities both reiterated buy ratings.
SNAP shares traded higher on Friday, and despite a brief wobble at midday that trimmed its gains, the $61.30 closing price meant that it advanced 7.39% during the session.
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