The next catalyst for shares of Snap is unclear, according to Jefferies.
The next catalyst for shares of Snap is unclear, and that's enough of a reason to take a pause on the social media stock, according to Jefferies. Analyst James Heaney downgraded the technology stock to hold from buy, saying in a note to clients Thursday that a difficult macro picture should pressure Snap's revenue growth over the next year. Wall Street anticipates 9% growth in 2023. By comparison, Jefferies' revenue estimates assume just 2% growth.
"While many of these factors are well understood, [consensus revenue estimates] still appear too optimistic, particularly given the lack of company specific catalysts." Snap's valuation has come down drastically this year, with shares tumbling nearly 80% as it faces slowing growth and a weakening advertising market. That drop could protect Snap shares to the downside if not for its "lack of profitability and clear product catalysts," Heaney said.
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