Snap Stock Up 6%, Goldman Sachs Gives Snap Buy Rating with Price Target of $70

UTC by Steve Muchoki · 3 min read
Snap Stock Up 6%, Goldman Sachs Gives Snap Buy Rating with Price Target of $70
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Being a major social media outlet, Snap has benefited from the coronavirus outbreak as more people opt to socialize through online platforms.

Shares of American camera and social media company Snap Inc (NYSE: SNAP) closed yesterday trading at $51.23, up 6.15%. Meanwhile, they were down approximately 0.55% during the after-hours trading session. Apparently, Tuesday’s Snap-stock surge has been largely attributed to positive notes from two different analysts, Wedbush Securities analyst Michael Pachter and Goldman Sachs.

In a note to investors, Goldman Sachs reiterated its prior Buy call on Snap stock. According to the firm, it expects Snap stocks to hit $70 in the near future, thus a 45% rally from yesterday’s close. The strong buy call is pursuant to the firm’s continued tech development amid an increased customer base outside Europe and North America.

“Snap’s Spotlight product, new ad campaign objectives and bid types, and the Unity partnership, have the potential to drive further momentum in engagement growth as well as provide valuable scale to advertisers,” Goldman Sachs said.

Despite the increased competition in the social media industry, Goldman Sachs believes Snap will experience continued growth in revenue in the coming quarters. According to Goldman Sachs, the Snapchat advertisement base has grown despite the ongoing pandemic that has devastated most businesses.

On the other hand, Pachter believes the crazy speculation from investors will drive the Snap prices even higher. “Most investors know how to draw a line between two points, and most of them extrapolate the line into perpetuity.” He said.

Snap Stock Outlook

Being a major social media outlet, Snap has benefited from the coronavirus outbreak as more people opt to socialize through online platforms. Notably, Snap global users have continued to grow, fueled by the improved features on the platform. According to Snap’s user metrics, its user base has grown approximately 75% in the past two years.

Apparently, Snap has seen a proliferation of a user base in India in the past few quarters. The company has focused on developing features that attract Indian customers, putting in mind the country is one of the most populous with a huge portion of youths. Notably, snap developed an android application that is in line with the Indian market. Previously, Snap noted that it saw a 150% jump in Indian users between the third quarters of 2019 and 2020.

Having penetrated most global markets and established itself, Snap investors are optimistic the stocks will continue with the upward trend.

The market data provided by MarketWatch indicates Snap stocks are up approximately 213% year-to-date. In addition, they have managed to add 97% and 15% in the past three months and one month respectively. Notably, Snap has a market valuation of $71.91 billion with 1.23 billion outstanding shares.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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