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Last Minute Thought: Buy or Sell SNAP Stock Before Q2’19 Earnings?

support@smarteranalyst.com (Ben Mahaney)

Get ready! Snap (SNAP) reports earnings in just a few minutes..

Snap is raring to release second-quarter results this evening once the bell tolls, and RBC's top analyst Mark Mahaney continues in his bullish parade along with flurry of analyst upgrades this month. Ahead of the print, Mahaney reiterates an Outperform rating on SNAP stock with $17 price target, which implies nearly 17% upside from current levels.

As always, we like to give credit where credit is due. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Mahaney has a yearly average return of 24.1% and an 68% success rate. The top analyst is ranked #26 out of 5,192 analysts. (To view Mahaney's stock list, click here)

Mahaney is looking for $359 milion in revenue and ($121 million) in Adjusted EBITDA, compared to the Street’s revenue estimate of $359 million and the Street’s EBITDA estimate of ($122MM). Furthermore, the analyst is looking for 2 million net new daily-active-users, in line with the Street, which "seems reasonable if not conservative given positive commentary regarding Android results from our meeting with management and strong Google Play Download trends," Mahaney noted.

The analyst concluded: "Based on intra-quarter data points and our model sensitivity analysis, we believe the Street’s Revenue and EBITDA estimates for the quarter are reasonable, with slightly greater chance of upside vs. downside variance. We would expect to see management provide guidance for Q3, and we believe both the Street’s Q3 Revenue growth assumption (12% Q/Q growth) and EBITDA loss estimate of ($97MM) are ballpark reasonable."

Overall, Wall Street sizes up SNAP as a ‘Moderate Buy’ stock, as the bulls edge out the cautious on the chip giant. In the last 3 months, SNAP has received 9 bullish ratings versus 12 analysts hedging their bets, and 3 bears who doubt the doubt the rally can be sustained. Yet, the consensus price target hints at caution baked into expectations here. The 12-month average price target of $14.20 reflects a slight downside potential of 4%. (See SNAP's price targets and analyst ratings on TipRanks)

 

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