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Why Snap Stock Surged Today

Evan Niu, CFA, The Motley Fool

What happened

Shares of Snap (NYSE: SNAP) have surged today, up by 8% as of 3:30 p.m. EDT, after getting a bullish upgrade from Wall Street. Pivotal Research changed its rating on the Snapchat parent from hold to buy.

So what

Analyst Michael Levine also increased his price target from $13.25 to $17.25, citing improvements in many key areas of the business. The redesigned Android version of Snapchat is helping the company return to user growth, after the user base stagnated throughout much of 2018. That could represent an important "inflection point in the business," according to Levine.

Three screenshots of Snapchat Lenses

Image source: Snap.

Now what

Additionally, Snap released several new Lenses earlier this month at its first Snap Partner Summit, which Levine considers "among some of the most impressive product innovation we have seen in some time from the company." Lenses are Snapchat's popular augmented reality (AR) filters.


Citing channel checks, the analyst believes the progress with user growth, engagement, and product innovation is already translating into improved relationships with advertising customers, which should help strengthen the business going forward.

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Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.