Goldman Sachs just upgraded this tech company’s shares to ‘Buy’.
Snap Inc. (SNAP)
From Cabot Growth Investor
We admit it’s unlikely that Snap Inc. (SNAP) will grow up to be another Facebook or Google, but that’s OK. There is still great potential here, and the reason surrounds its appeal to young audiences. In fact, 75% of 13- to 34-year-olds use Snap’s popular app, which is more than even Instagram.
The first couple of years of this stock’s life were brutal, but new management and a slew of new products (including more camera-based and some augmented reality offerings, video collections, games and even a bit of original content) and technology (including a new Android app that loads faster and has boosted engagement) helped the user count to increase in Q1 (to 190 million) and kept revenue growth strong (up 39% in Q1, expected to be up 30% to 40% both this year and next).
Earnings are still in the red but quickly approaching breakeven, and the stock’s action is hard to ignore—it broke out to new recovery highs on the first day off the market’s June low, surged as high as 15 and has paused on light volume since.
We’re starting a position here with an initial loss limit just under 12. BUY A HALF.
Michael Cintolo, Cabot Growth Investor, www.cabotwealth.com, 978-745-5532, July 3, 2019