The IPO and subsequent few months of trading of SNAP has been an unmitigated disaster, says one analyst. MoffettNathanson analyst Michael Nathanson thinks that SNAP is still overpriced by more than 25% and will fall to just $11 per share, way below its IPO price. The stock has not performed well since its debut, and even Morgan Stanley, its lead underwriter who presumably knows it best, has given up on it, drastically lowering their price target. The competitive environment for advertising is proving difficult for SNAP and it is seeing a seasonable slump in its core business. It also only lasted nine quarters without a slowdown in growth, a short time compared to rivals.
FINSUM: Snap is facing some headwinds, but if it can turn itself around and prove wrong its critics, there are a lot of gains to be had. One thing to worry about is the end of the lockup period for insiders, which is coming soon and could send the stock sharply lower.