Atlantic Equities - SNAP (SNAP) Better qtr, more required to justify valuation

Report

Atlantic Equities

James Cordwell

Better qtr, more required to justify valuation

Snap delivered a better Q4, with both user growth and revenue reaccelerating. The company continues to make solid progress in monetising the platform, with the advertiser base widening and losses narrowing as a result. However, with revenue growth guided to decelerate in Q1 and the company still some way from profitability, we still do not view it as being on a trajectory to justify its valuation.

07/02/2018 5 EN

Underlying

SNAP

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United States

Provider

Atlantic Equities

Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.

Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.

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Analysts

James Cordwell

Other Reports on these Companies

Atlantic Equities

Some signs of DAU stabilisation

Q2 revenue and EBITDA were ahead, but DAUs missed expectations albeit while potentially indicating some stabilisation following the disruption caused by the app redesign earlier in the year. Q3 guidance bracketed consensus and DAUs could return to growth in H2, but with the stock still at a premium to its social media peers we continue to view the risk/reward as unattractive.

August 8, 2018 August 8, 2018 5 EN

Atlantic Equities

App redesign drives declining engagement

Q1 users, revenue and adjusted EBITDA missed as the app redesign drove declining engagement across the quarter and the transition to programmatic pressured the Creative Lenses & Filters ad product. With competitive dynamics intensifying, Snap can ill afford these execution-related issues, and we lower our PT to $9.50 from $14 reflecting the greater uncertainty regarding the company's longer term prospects.

May 2, 2018 May 2, 2018 4 EN

Model update

This report contains forecasts updated for reported Q218 results. Neither our financial nor PSU estimates are materially changed and we remain Overweight with a 12m PT of $365.

October 1, 2018 October 1, 2018 5 EN

Kunaal Malde ... (+2)

Kunaal Malde
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V/MA: strong core, adjacencies more competitive

V/MA remain core long term holdings with secular cash to card tailwinds driving strong growth long term, supported by developments such as contactless. Valuation remains reasonable, although newer growth areas such as B2B face greater competition. We remain Overweight V/MA, raise our price targets to $173 and $250 respectively and currently favour V which trades on a PE of 28x, three turns lower than MA.

October 1, 2018 October 1, 2018 17 EN

John Heagerty ... (+3)

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Banks: Trading update and 3Q18 preview

Market volatility has moderated significantly since the beginning of the year, ceasing to be a tailwind for the banks' trading revenues in 3Q18. Despite the strong IB pipelines (announced M&A is up 40% YTD), fee pools have been affected by timing issues and are down 15-20% across the industry for the current quarter. Medium term, the outlook remains positive thanks to improving GDP growth, benign credit conditions, rising interest rates and a deregulatory focus. We have lowered our 3Q18 EPS estimates by 3% on average. Our longer term forecasts decline only modestly by 1%. C remains our t...

September 27, 2018 September 27, 2018 14 EN

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Better qtr, more required to justify valuation

Some signs of DAU stabilisation

App redesign drives declining engagement

Model update

V/MA: strong core, adjacencies more competitive

Banks: Trading update and 3Q18 preview

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