Don't Look Now, But Snap Stock Is Hot Again
Don't look now, but one of this year's most ridiculed broken IPOs is on the cusp of fixing itself. Shares of Snap, Inc. (NYSE: SNAP) closed at their highest level in more than three months on Wednesday. Snapchat's parent company closed at $15.98, rallying distance to get back to its IPO price of $17.
Snap stock rose 11.4% on Wednesday after a bullish analyst raised his profit target after updating his outlook for the social media speedster. Stephen Ju at Credit Suisse -- whose price target previously matched Snap's IPO price -- is bumping his goal to $20 just ahead of next month's quarterly report. Ju's modeling 78.2 million daily active users in North America for the quarter that ended last month, 3.2 million more than it had at the end of the second quarter. He was previously targeting a sequential gain of just 1.5 million daily active users. Ju now sees Snap posting a deficit of $0.18 a share on $227.9 million. Wall Street's actually holding out for just a loss of $0.15 a share on $240 million in revenue, but Ju's earlier top- and bottom-line forecasts used to be even lower. He's ramping up his valuation parameters through the end of next year.
Ju is sticking to his outperform rating, adding fuel to Snap's recent rally. The shares have soared 41% since bottoming out in August. It's not fair to call Snap a market darling, but it's hard to dismiss a stock that has crushed the market over the past two months.
Source: Fool.com
