Cantor Fitzgerald has lowered its price target for Snap Inc. to $7.00 from $9.00, while retaining a Neutral recommendation on the shares. The change comes amid a sharp sell-off in Snap stock - the company’s shares plunged 26.12% over the past week and were trading at $5.12, just above a 52-week low of $5.10.
The research firm made the adjustment after reviewing Snap’s fourth-quarter results. On the top line and in EBITDA terms, the company modestly beat consensus estimates, with revenue exceeding forecasts by 1% and EBITDA outperforming by 18%. Despite those beats, Snap’s daily active users (DAUs) arrived slightly below Street expectations, a shortfall Cantor attributed to reduced spending on user acquisition.
Over the trailing 12 months Snap remains unprofitable. The company reported revenue of $5.93 billion, an increase of 10.63% year-over-year, while trailing EBITDA stood at -$368.53 million. Those figures underscore a business still transitioning toward consistent profitability despite revenue growth.
Looking ahead, Snap issued guidance for the first quarter in a $1.50 billion to $1.53 billion range, which implies modest acceleration at the high end of the outlook. The company noted that no revenue contribution has yet come from its partnership with Perplexity, for which terms are still pending. Management also flagged an expectation for year-over-year gross margin expansion driven by lower infrastructure costs.
InvestingPro analyst projections referenced alongside the results anticipate the company reaching profitability this year, with EPS estimated at $0.44 for fiscal 2026 and revenue growth around 13%. Within Cantor Fitzgerald’s models, the firm left its fiscal year 2027 revenue assumptions intact but increased its EBITDA forecast by 16%, a move that nonetheless accompanied a reduced price target.
Other details from the quarter paint a mixed picture. Snap reported a 10% year-over-year rise in fourth-quarter revenue, marginally above consensus. Advertising revenue grew 5% year-over-year, while revenue from Snap+ subscriptions expanded sharply, up 62%. Offsetting those gains, Snap experienced a significant sequential decline in North American DAUs - a loss of 3.3 million users quarter-over-quarter, described as the largest sequential drop on record for the company.
Analyst responses to Snap’s results and stock weakness have varied. TD Cowen trimmed its price target to $8 and maintained a Hold rating. Raymond James reiterated an Outperform rating with a $10 target, pointing to Snap’s emphasis on profitable growth. Benchmark kept a Hold rating while noting the user decline despite Snap posting its first GAAP profit. Stifel moved to upgrade the stock from Sell to Hold, citing the steep fall in the share price, and B.Riley upgraded to Buy while maintaining a $10 target, highlighting progress in subscription initiatives such as Snapchat+.
In sum, the quarter delivered modest upside on revenue and EBITDA and showed tangible subscription momentum, but user trends and pending partnership terms contribute to continued uncertainty about the company’s near-term growth trajectory. Cantor Fitzgerald’s revised EBITDA outlook and lowered price target reflect that mixed assessment.
What this means - The adjustment in valuation and the range of analyst reactions underscore the tension between improving monetization indicators and weakening user trends. Market participants will likely watch user metrics, partnership developments, and profitability milestones closely as signals of Snap’s path forward.