Challenges for Snap: Balancing P&L Improvement with Product Investment, Analyst Says
Portfolio Pulse from Anusuya Lahiri
Benchmark analyst Mark Zgutowicz reiterated a Hold rating on Snap Inc (SNAP) ahead of its 2Q earnings, citing concerns over revenue growth catalysts and competitiveness. The analyst also noted that TikTok is becoming more aggressive with new DR offerings, potentially taking more market share from SNAP and Meta Platforms Inc (META). SNAP's investments in AI/ML are seen as a risk to near-term FCF. The analyst estimates a -32% GAAP operating margin for SNAP in FY23E.
July 21, 2023 | 6:53 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
TikTok's aggressive new DR offerings are seen as a threat to Meta Platforms Inc (META), potentially taking more market share.
The analyst's mention of TikTok's aggressive DR offerings as a threat to META could negatively impact investor sentiment and put downward pressure on the stock in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
SNAP faces challenges in balancing near-term P&L improvement with product investment. The company's investments in AI/ML are seen as a risk to near-term FCF. The analyst estimates a -32% GAAP operating margin for SNAP in FY23E.
The analyst's concerns over SNAP's revenue growth catalysts and competitiveness, along with the increasing threat from TikTok, could negatively impact investor sentiment and put downward pressure on the stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100