Snap Inc (NASDAQ: SNAP) has received an upgrade after better-than-expected user growth.
Goldman Sachs analyst Heath Terry upgraded Snap from Neutral to Buy and raised the price target from $13 to $18.
The upgrade comes as Goldman Sachs sees product improvements and feature additions leading to gains in the second half of the year.
“For Snap, we believe product improvements and feature additions are driving positive trends in user growth and engagement that, along with monetization improvement from ad tech initiatives, should drive upside to consensus estimates,” Terry said.
The analyst said underlying strength in core revenue drivers for internet companies, online advertising and e-commerce should result in upward revisions to consensus estimates and stock price outperformance.
The popularity of Snapchat's latest viral gender swap filters are also leading to the upgrade.
Snap shares are up 1.58%, trading at $15.80.
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