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Snap is sliding after another Wall Street analyst sees slowing user growth (SNAP)

Jacob Sonenshine
Screen Shot 2018 06 20 at 11.24.53 AM
  • Snap is losing ground Wednesday after Needham's Laura Martin lowered her user and revenue estimates. 
  • On Tuesday, Cowen analyst John Blackledge lowered his price target for the same reason. 
  • Snap is down almost 9% since Monday's close. 
  • Watch Snap trade in real time here. 

Snap shares are down 3.76% to $12.81 apiece Wednesday after yet another Wall Street analyst revised their user and revenue growth estimates lower. 

"We lower our Snap revenue estimates by 15% for second-quarter 2018 and by 5% for fiscal year 2018, based on lowered daily active user growth projections," Needham and Company analyst Laura Martin wrote in a note out to clients on Wednesday. The lowered user count likely "suggests a dramatic slowdown of spending by brands on Snap in second-quarter verse first-quarter," she said.  

Martin's projected number for daily active users for second-quarter 2018 is 188 million, down from her previous estimate of 199 million. The downward revision leads Martin to project revenue of $241 million for the quarter. 

Even with the lowered revenue estimate, Martin raised her earnings-per-share estimate 11% on the account of "aggressive cost cutting." She projects a loss of $0.34 for the current quarter. Her rating on the stock remains at 'underperform.'

Snap investors haven't had much to cheer about the the last two days. On Tuesday, shares fell as much as 10% after Cowen analyst John Blackledge lowered his revenue forecast. 

"We trimmed our second-quarter 2018, fiscal year 2018-2023 estimates, lowering our revenue / EBITDA forecast on slightly lower Daily Active Users (DAUs) and advertising average revenue per user," Blackledge, who lowered his price target to $9 from $10, said. 

The stock had a good run for roughly two weeks after Citron Research's Andrew Left published a note saying Snap is "one stabilizing quarter from giving investors a 30% or more return -- more than you can see in any FANG stock in our opinion."

That, along with a note from financial analytics firm S3 Partners saying a Snap short-squeeze could be on the horizon, propelled the stock to a level not seen since before its first-quarter earnings disaster

Snap is down 14.08% this year. 

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