Freedom Capital Markets has lowered its price target for Snap Inc. (NYSE:SNAP) to $8.00 from $10.00 while retaining a Buy rating on the shares, reflecting a reassessment after mixed fourth-quarter 2025 results.
Quarterly performance and drivers
Snap beat consensus estimates for both revenue and adjusted EBITDA in the fourth quarter of 2025. The firm attributed the outperformance to growth in Snapchat+ paid subscribers and stronger monetization of Direct Response advertising. Margins improved, according to Freedom Capital, aided by cost optimization efforts and a shift toward a higher-margin business mix.
Guidance and user metrics
Despite those positives, Snap issued first-quarter 2026 revenue guidance that came in below Street expectations. User growth also decelerated, with daily active user expansion slowing sharply overall and turning negative in North America. Management noted it did not include any potential revenue from a planned integration with Perplexity in its guidance, citing delays in finalizing the partnership agreement.
Analyst outlook and valuation
Freedom Capital Markets revised down its revenue and margin forecasts, and its new $8 price target corresponds to an implied 13x EV/EBITDA multiple on 2027 estimates. Market pricing at the time of the report shows Snap trading at $5.06, down 36% year-to-date. InvestingPro analysis referenced in the commentary suggests the stock is undervalued at current levels and includes Snap on a Most Undervalued stocks list.
InvestingPro Tips cited in the update indicate analysts expect the company to be profitable this year, with nine analysts having revised earnings estimates upward for the upcoming period. For those seeking deeper company-specific analysis, InvestingPro offers a comprehensive Pro Research Report on SNAP as part of its library.
Subscriber milestone and varied analyst reactions
Snap recently passed a significant subscription milestone, exceeding 25 million Snapchat+ subscribers, adding roughly 1 million subscribers since its fourth-quarter earnings announcement earlier in the month. This development highlights continued expansion in Snap’s subscription business even as ad-related metrics cooled.
Other brokerages adjusted their targets as well. Truist Securities lowered its target to $8 from $11 and kept a Hold rating, citing muted advertising growth. Piper Sandler cut its target to $8 from $10, pointing to weaker daily active user trends and expected higher expenses while noting revenue and EBITDA beat expectations. Cantor Fitzgerald trimmed its target to $7 from $9 despite revenue and EBITDA surpassing Street estimates. Collectively, these moves reflect differing assessments among analysts about Snap’s near-term trajectory despite some common recognition of recent revenue and profitability beats.
Takeaway
Freedom Capital’s adjustment encapsulates the mixed picture at Snap: historically positive top-line and margin momentum in the most recent quarter paired with softer guidance and a slowdown in key user metrics. The firm’s revised forecasts and the cluster of lowered price targets from other analysts underline the uncertainty around Snap’s ad recovery and user growth path even as subscription gains continue.