Snap, Inc. (Buy, TP: $13) SNAP 1Q23 Model Update
We lower revenue estimates and raise expenses due to weak 2Q23 revenue and adjusted EBITDA guidance. Although incremental investment in infrastructure and headcount will keep margins depressed in 2023, we expect revenue growth to reaccelerate in 2H23 as the benefit from changes made to the ad platform begins to be seen. We lower our price target to $13 from $14 driven by the lower estimates, but partially offset by rolling valuation to 2024.Snap is a camera company. The company's primary product, Snapchat, is a camera application that helps people to communicate visually through short videos and images called Snaps. The company's products are: Camera, which includes tools for people to personalize their Snaps; Chat, which includes interacting with friends on Snapchat; Discover, which includes providing Stories and Shows from publishers, creators, and the community; Snap Map, which shows a live map of the user's location; Memories, which enables users to save the Snaps they create in a personal collection called Memories; and Spectacles, which includes creating Memories by using Spectacles, which are the company's sunglasses that make Snaps.
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