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Investing.com - Evercore ISI reiterated an In Line rating and $9.00 price target on Snap Inc (NYSE:SNAP), which currently trades at $6.12 with a market cap of $10.32 billion.
The firm noted Snap continues to face challenges as a non-core, mid-tier internet advertising platform. Meta, Google, and Reddit reported robust ad market performance in the fourth quarter, while Snap’s ad revenue growth was approximately 5%. The company posted 10.6% revenue growth over the last twelve months with a healthy 55% gross margin, though it remains unprofitable with EPS of -$0.27.
Evercore ISI raised its 2026 and 2027 revenue estimates by 1%. The firm also increased its 2026 and 2027 EBITDA estimates by 17% and 26%, respectively.
The $9 price target is based on a target multiple of 9 times the firm’s 2027 EBITDA estimate of $1.7 billion. Snap currently trades at 8 times 2026 EV/EBITDA. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts predicting the company will turn profitable this year.
Evercore ISI cited uncertainties including the unclear timeline of the Perplexity deal, softer ad demand for Snap compared to the broader market, and questions about how restructuring impacts the company’s Specs and augmented reality initiative.
In other recent news, Snap Inc. pre-announced its first-quarter 2026 results, reporting revenue slightly ahead of expectations and significantly surpassing projections on the bottom line. The company has initiated a major restructuring effort, planning to reduce its global headcount by 16%, impacting approximately 1,000 employees and closing around 300 open roles. This move is expected to result in annualized cost savings of about $500 million. As part of this restructuring, Snap anticipates incurring a pre-tax severance charge between $95 million and $130 million.
Several analyst firms have adjusted their ratings and price targets for Snap. BMO Capital raised its price target from $13 to $15, maintaining an Outperform rating, due to the anticipated efficiencies from the workforce reduction and advancements in artificial intelligence. Meanwhile, Stifel lowered its price target to $4.50 from $5.50, citing concerns about potential advertising budget cuts affecting smaller social media platforms like Snap. Wolfe Research reiterated a Peerperform rating following the restructuring announcement.
Snap’s CEO, Evan Spiegel, emphasized the necessity of these layoffs to enhance operational efficiency and drive profitable growth. Truist Securities maintained a Hold rating with an $8 price target, reflecting a cautious stance amid these developments.
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