Snapchat Shares Dive As Analyst Suggests User Engagement is in Decline

    Author Nicky ToorPosted on Categories Online MediaTags , , , , , , , , , , , , , , , , , , , ,
    Snapchat shares

    Snapchat shares: Snap Inc. (NYSE:SNAP) shares have taken a dive after an analyst at the Wall Stree firm Cowen said that user engagement is in decline.

    According to a recent article from CNBC, analyst John Blackledge lowered his price target for Snapchat shares from USD $10.00 to $9.00 and sent a note to clients on Tuesday to acknowledge that “per [the company’s] recent ad buyer survey, SNAP was lowest Social platform in key attributes like ROI, data and user targeting.”

    Blackledge’s new estimate is nearly 36% lower than what the company’s closing share value was on Monday, according to CNBC.

    In a survey of almost 2,500 US consumers, Cowen found that users of Snapchat only spent an average of 33 minutes on the app for its second quarter. The results show that this is down seven percent year-over-year.

    This resulted in Cowen and Blackledge lowering their “revenue/EBITDA forecast on slightly lower Daily Active Users (DAUs).”

    In addition to decreasing predictions for the value of Snapchat shares, Blackledge has lowered his daily average user estimate, for the second quarter, from 196 million users to 194 million users and also reduced the second-quarter sales estimate from $262 million to $248 million.

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    Snapchat shares have fallen nearly eight percent on Tuesday after Blackledge’s estimates were revealed. As of 1:30 pm EDT, the company share value was sitting around $12.96 and had already reached a low of $12.66.

    So far, the highest share value that Snapchat has reached is $13.63.

    As per the company’s historical data for share value, Snapchat looked like it was gradually increasing within the past couple weeks, with share value closing at over $14.00 since June 15.

    Blackledge’s analysis has put that upward trend to a halt and Snapchat may now be on its way back to a downward slope.

    Do you think Snapchat will continue this downward trend? Will the company be able to recover and be able to increase its total user engagements?

    Featured Image: DepositPhotos/TPOphoto

    Author Nicky Toor
    About the author: Nicky graduated with a BA in Journalism and a Minor in English from Kwantlen Polytechnic University. She has written on a variety of different topics including fashion, beauty, entertainment and finance. Her favourite things to do are travel (when she can) and to spend time with friends and family, including her dog Kobe.