Snapchat's stock price has been falling for most of 2017, and JPMorgan thinks it will go even lower.
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JPMORGAN: Snapchat isn't adding enough users, and the stock could go lower (SNAP)
Snap's stock price is down 15.6% so far this year, and JPMorgan thinks it will fall even further.
Snapchat CEO Evan Spiegel
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In a note to investors Monday, JPMorgan lowered its price target 10% to $18 from $20 while maintaining its neutral rating.
The bank is downgrading its price target based in part on fewer people flocking to the platform. Thanks to competition from Facebook, users are not expected to join Snapchat as fast as previously expected.
JPMorgan estimates only 8 million users will join Snapchat in the second quarter of 2017, instead of the 10 million that were previously expected.
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Snap also isn't expected to show a profit until 2020, according to JPMorgan. The company saw strong ad spending growth around this time last year related to the Olympics and US election, but those were one-time events and aren't expected to be replaced this year.
Spectacles, Snap's video-capturing glasses, debuted in the EU this week, but aren't expected to sell well enough to impact Snap's bottom line. JPMorgan cut their revenue estimates from Spectacles nearly in half, from $119 million in 2017 to $56 million.
These downsides are not surprising to hear from JPMorgan, given that the bank has been bearish on Snap since it went public. JPMorgan received the third-biggest share of stock to sell after it helped underwrite the company's IPO in March.
Shares of Snap are down 15.64% from its initial listing price of $24.48, and were down 1.4% in early trading on Monday.
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