Analysts Are Downgrading These 5 Stocks After Weak Earnings Reports

3. Snap Inc. (NYSE:SNAP)

Number of Hedge Fund Holders: 54

Snap Inc. (NYSE:SNAP) is a Santa Monica, California-based social media company that posted its Q2 2022 results on July 21.

Snap Inc. (NYSE:SNAP) revealed that companies are facing supply chain challenges, a shortage of labor, and rising costs, which caused a significant reduction in their advertising revenue. Snap Inc. (NYSE:SNAP) revealed that it would slow down recruitment and look for new ways to generate revenues to grow at a handsome pace.

The company’s Q2 revenue increased by 13% YoY to $1.11 billion but missed consensus estimates of $1.14 billion by $30 million. Daily active users were reported at 347 million and crossed the analysts’ estimate of 344 million. Snap Inc. (NYSE:SNAP) refrained from providing revenue and EBITDA guidance for Q3 2022 amidst the challenging environment. Following these developments, Eric Sheridan at Goldman Sachs downgraded Snap Inc. (NYSE:SNAP) stock from a Buy to a Neutral rating and lowered the target price from $25 to $12 on July 22. The analyst sees the quarterly result as “broadly negative.”

Baron Funds shared its outlook on Snap Inc. (NYSE:SNAP) in its Q4 2021 investor letter. Here’s what the firm said:

“Snap Inc. is the leading social network among teens and young adults in North America and a growing number of overseas markets, including Western Europe and India. Shares fell this quarter on a greater-thananticipated impact from Apple’s new privacy changes for iOS mobile devices. These changes made it more difficult for Snapchat to measure the effectiveness of ads shown on its platform. We believe this is a near-term, industry-wide issue for which Snap is already developing a solution. Longer term, we continue to view Snap favorably as the company sustains its rapid pace of product innovation and expands its premium partnerships with advertisers.”