Update shared on27 Aug 2025
Fair value Decreased 1.39%Analysts modestly lowered Snap’s price target to $9.28, reflecting revenue and EBITDA misses from Q2 amid mixed ad market dynamics and competitive pressures, partially offset by strong user growth and optimism around a more favorable macro backdrop.
Analyst Commentary
- Mixed Q2 results reflected revenue and EBITDA misses, partly due to new ad campaign pricing mechanisms, though user growth in Spotlight remains strong at 23% y/y.
- Bullish analysts cite a more favorable macro backdrop, including lower China tariffs, and have updated valuation methodologies to reflect this improvement.
- Bearish analysts point to slowing advertising growth and increasing competitive pressures as ongoing headwinds.
- Digital ad spending is seeing some rotation away from TikTok towards platforms like Snap, Pinterest, and Reddit due to TikTok ad budget declines.
- Some analysts note consensus estimates for Q2 are conservative, with progress in Direct Response ads but tempered by continued macroeconomic uncertainty.
What's in the News
- Snap is exploring fundraising options, including potential outside investment or spinning off its Spectacles AR glasses project, to better compete against rivals like Meta (The Information).
- Ongoing legal and regulatory developments in the broader social media sector, such as Italy’s unprecedented EUR 1.04B VAT claim against major platforms, may signal heightened scrutiny and compliance risks for Snap and its peers (Reuters).
- Executive turnover and operational instability at competing platforms like X (formerly Twitter), highlighted by CEO Linda Yaccarino’s reported departure discussions, may affect competitive dynamics in the social media space (NYT).
- Uncertainty surrounds TikTok’s U.S. operations due to shifting regulatory decisions and acquisition speculation, impacting the competitive landscape among platforms including Snap (Reuters, WSJ).
- New York’s law requiring detailed hate speech and disinformation moderation disclosures, currently facing legal challenges, could drive increased transparency and compliance costs across major social media firms, including Snap (Bloomberg).
Valuation Changes
Summary of Valuation Changes for Snap
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $9.41 to $9.28.
- The Consensus Revenue Growth forecasts for Snap has fallen slightly from 10.2% per annum to 10.0% per annum.
- The Future P/E for Snap has fallen slightly from 26.10x to 25.57x.
Disclaimer
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