Piper Sandler has reduced its 12-month price target for Snap Inc to $8.00 from $10.00 while retaining a Neutral rating on the shares. The move follows Snap’s latest financial update and comes as the stock has experienced a sharp decline, sliding roughly 26% in the last week and trading around $5.34, only slightly above its 52-week low of $5.10.
The brokerage noted that Snap’s most recent quarterly results modestly beat its forecasts on the top line and materially surpassed expectations on EBITDA. Specifically, revenue came in about 1% above Piper Sandler’s prior estimates and adjusted EBITDA outperformed by roughly 18% relative to those same forecasts. Over the trailing twelve months Snap reported revenue of $5.93 billion, an increase of 10.6% year-over-year, while the company remained unprofitable on a GAAP basis with a diluted loss per share of $0.27.
Despite the revenue and EBITDA beats, Piper Sandler pointed to weakening daily active user, or DAU, trends as a central factor in trimming its price target. The firm also signaled it expects higher expenditures in the coming year, including costs associated with product initiatives, and reduced its fiscal 2026 EBITDA estimate by 9% as a result. Management has flagged an anticipated launch of a refreshed Spectacles product later in 2026, which Piper Sandler describes as a potential call option for the company but one that will add incremental expense.
On the revenue mix, Piper Sandler calculated that Snap’s subscription business is gaining traction and now represents nearly a $940 million annual run-rate. Nonetheless, the firm emphasized that Snap’s overall revenue growth still lags that of its digital advertising peers.
For the first quarter of 2026, Snap’s management provided guidance calling for revenue between $1.50 billion and $1.53 billion with adjusted EBITDA in a range of $170 million to $190 million. The midpoint of that revenue range implies roughly 10% year-over-year growth, a pace the company characterized as consistent with its fourth-quarter 2025 performance.
Analysts tracking the company forecast that Snap will reach profitability in 2026, with consensus estimates pointing to an EPS of $0.44 for the year. Meanwhile, balance-sheet metrics show a strong near-term liquidity position, with a current ratio of 3.56 that suggests ample coverage of short-term obligations. The company operates with a moderate degree of leverage as well, with a debt-to-equity ratio of 1.82.
Investor reaction and peer analyst responses to the quarter were mixed. Several firms adjusted their price targets and ratings in the wake of the results: Cantor Fitzgerald cut its target from $9 to $7 while keeping a Neutral stance; TD Cowen trimmed its target to $8 while retaining a Hold rating; Raymond James continued to carry an Outperform rating with a $10 target; and Stifel moved Snap from Sell to Hold and maintained a $5.50 target following the sharp decline in the share price.
The quarter’s underlying metrics showed both positives and negatives. Revenue rose 10% year-over-year and adjusted EBITDA of $358 million eclipsed an expected $302 million. On the other hand, daily active users missed forecasts, with North America suffering a meaningful quarter-over-quarter decline of 3.3 million users. Management noted that the company reached its first GAAP profit in the quarter through reductions in certain community growth marketing and infrastructure spending.
From an analytical standpoint, the picture is nuanced: Snap delivered above-expectation revenue and materially better-than-expected EBITDA, has a growing subscription revenue stream approaching a near-billion-dollar run-rate, and retains healthy short-term liquidity. Offsetting those positives are weakening DAU metrics, increased near-term expense pressure tied to product rollouts, a still-unprofitable trailing EPS figure, and revenue growth that trails larger digital ad peers.
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