Citi lowered the firm’s price target on Snapchat’s parent company to $6 from $10 and kept a ‘Neutral’ rating on the shares.
Shares of Snap Inc (SNAP) hit an all-time intraday low of $4.72 on Thursday after Citi lowered the price target on the company to $6.
Citi lowered the firm’s price target on Snapchat’s parent company to $6 from $10 and kept a ‘Neutral’ rating on the shares. The firm updated the company’s model post the Q4 report. Snap is facing continued brand advertising headwinds, the analyst told investors in a research note.
Snap’s Q4 Earnings
Last week, Snap reported fourth-quarter revenue that surpassed targets, although its Q1 forecast came in slightly below.
Snap’s fourth quarter revenue rose 10% to $1.72 billion, surpassing analysts’ estimates of $1.70 billion.
For the first quarter, Snap expects revenue of $1.5 billion to $1.53 billion, below the $1.55 billion analysts were projecting. The company noted that the Q1 revenue guidance range excludes any potential revenue from the Perplexity integration as it is yet to mutually agree on a path to a broader roll out.
The company further estimates that adjusted core profit will be between $170 million and $190 million in Q1.
Fresh Lawsuits
Earlier this week, Texas Attorney General Ken Paxton sued the company over allegations of failing to warn parents and consumers sufficiently about the inappropriate material on its app, and its addictive design.
AG Paxton alleged in the lawsuit that Snap recommends or exposes users, including teenagers, to explicit and mature content, including profanity, sexual content or nudity, alcohol, tobacco, and drug use or references.
AG Paxton is seeking civil penalties and a permanent injunction under Texas consumer protection laws to halt what he stated were “false, misleading, and deceptive representations.”
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around SNAP stayed within the ‘extremely bullish’ territory over the past 24 hours, while message volume remained at ‘high’ levels.
A Stocktwits user expressed disappointment over the stock’s poor performance.
Another, however, voiced hopes for the Perplexity partnership driving the stock as high as $20.
SNAP stock has fallen 55% over the past 12 months.
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