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Investing.com - Cantor Fitzgerald raised its price target on Snap Inc (NYSE:SNAP) to $9.00 from $7.00 on Thursday, while maintaining a Neutral rating on the social media company’s stock. The new target sits above Snap’s current trading price of $8.26 but remains below InvestingPro’s Fair Value estimate, suggesting the stock may be undervalued despite its 32% year-to-date decline.
The price target increase follows Snap’s third-quarter results, which exceeded analyst expectations with revenues and EBITDA surpassing Street estimates by 1% and $57 million, respectively. The company’s fourth-quarter guidance projects 8-10% growth, suggesting stability at the high end of the range. This builds on Snap’s 11.75% revenue growth over the last twelve months, with analysts forecasting EPS of $0.27 for fiscal year 2025.
Snap’s advertising revenue growth accelerated by 1 percentage point to 5%, primarily driven by improvements in direct response advertising as headwinds from Sponsored Snaps moderated. Daily active users (DAUs) slightly exceeded prior guidance with stable 15% growth in Rest of World markets. InvestingPro data reveals two important insights: while Snap isn’t profitable over the last twelve months, analysts predict the company will be profitable this year. Discover more with InvestingPro’s comprehensive research report on Snap, part of its coverage of 1,400+ US equities.
Cantor Fitzgerald highlighted Snap’s new partnership with Perplexity, noting it brings "plenty of potential to integrate AI experiences inside core Snapchat in 2026." The firm revised its FY26 revenue and EBITDA estimates higher by 8% and 76%, respectively.
The revised estimates reflect top-line outperformance, better expense management on infrastructure costs, and expected contribution from the Perplexity deal, according to the research firm.
In other recent news, Snap Inc. reported its third-quarter results, revealing a revenue of $1.51 billion, marking a 10% year-over-year growth, which is an acceleration from the previous quarter’s 9% growth. The company’s EBITDA was reported at $182 million with a 12.1% margin, surpassing both Evercore ISI and Street expectations. Following these results, Evercore ISI and BMO Capital both raised their price targets for Snap to $13, maintaining their respective "In Line" and "Outperform" ratings. BMO Capital noted that Snap’s revenue was 1% above consensus expectations and its adjusted EBITDA exceeded consensus by 46%.
Additionally, Snap’s partnership with Perplexity has led to several firms adjusting their price targets. Wells Fargo increased its price target to $10 from $8, citing the $400 million deal that gives Perplexity preferred access to Snap’s user base. BofA Securities also raised its price target to $10, highlighting Snap’s progress in diversifying its revenue streams through this partnership. Meanwhile, Stifel raised its price target to $7, despite maintaining a Sell rating, following the company’s better-than-expected third-quarter results and optimistic fourth-quarter guidance. These developments reflect Snap’s strategic moves and financial performance improvements.
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