- Most have warned of Snap's monetization issues, but Goldman Sachs couldn't disagree more.
- Snap's
- The investment bank raised its price target for Snap shares to $23, up from $18.
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GOLDMAN SACHS: What everyone's saying is Snap's biggest problem isn't really a problem
Most don't believe in Snap's ability monetize. But Goldman Sachs does.
Up and down Wall Street, banks have been warning about Snap's monetization problems. But a report from Goldman Sachs analyst Heath Terry begs to differ.
Goldman, which raised its Snap price target to $23 from $18 following the company's blockbuster fourth quarter, is confident based on Snap's increased "visibility into pricing." Snap's recent move into creating programmatic ad technology put a dent in its ad pricing, but Goldman notes the shift, which has "weighed on monetization growth in recent quarters, will naturally slow."
Although CPM (cost per impression) was down 25% quarter-over-quarter, total ad revenue increased by 38% for that time period because the number of ad impressions grew four-fold over the past year.
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Although the Goldman's report warns of Snap's volatility, the bank maintains the company's "audience and engagement represent a unique asset that will benefit from the growth and diversification of internet usage and advertiser adoption."
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