What Happened:
Shares of social network Snapchat (NYSE: SNAP) jumped 6.5% in the morning session after Jefferies analyst James Heaney upgraded the stock's rating from Hold (Neutral) to Buy and raised the price target from $12 to $16. The price target implied a potential 15% upside from where shares traded when the upgrade was announced. The analyst added that the worst headwinds are behind and sees "a pathway back to revenue growth over the next three to five years."
Is now the time to buy Snap? Access our full analysis report here, it's free.
What is the market telling us:
Snap's shares are very volatile and over the last year have had 34 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago, when the stock dropped 19.8% on the news that the company reported first-quarter revenue that missed analysts' revenue expectations, with both daily active users and revenue per user below expectations. EBITDA also missed. This marks the fifth straight quarter of topline revenue miss. SNAP’s business is likely experiencing company-specific issues, as advertising and social media peers broadly reported fine to good results.
Snap is up 56% since the beginning of the year. Investors who bought $1,000 worth of Snap's shares 5 years ago would now be looking at an investment worth $2,121.
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