We've been talking SNAP a lot lately. In fact, this is the third time in a row we've covered it. But can we not?
Weeks ago, we advised avoiding the SNAP IPO.
It was a disaster. The company was losing money. It wasn't likely to be profitable any time soon, or for the foreseeable future. And it definitely wasn't worth $29 a share, where it ran to.
Then, after all of the sellers jumped ship, we recommended buying it. In fact, not too long ago, we recommended buying it after the upgrades starting coming in. The stock is now up to $23.83 and still likely to run from our $20.26 entry price. It's now nearing $24 just days later. And should all go according to plan, it could run anotehr 20%, say the underwriters.
According to Fortune:
"We are bullish about Snap’s ability to monetize its highly engaged daily active user (DAU) base," a Morgan Stanley analyst wrote in a Monday note. " First, we believe Snap’s millennial audience and differentiated online video ad inventory are in demand by advertisers."
Morgan Stanley, Goldman Sachs, RBC Capital Markets, Credit Suisse, Jefferies, William Blair & Co., and Cowen, JMP Securities were among those who have given Snap a buy, or similar rating.
All were underwriters for the Snapchat IPO. On average, the 10 that did give the stock a target price said the company's stock would hit $27.20 over the next 12 months—a 19.6% upside from the stock's Friday close. Not counting the underwriters, the stock's average target price would have been $19.83—or 12.8% below Snap's Friday close.
At this pace, we could do very well with our long position. Hold.