Stifel Cites 25% Selloff, Upgrades Snap to Buy on User Growth and Ad Pricing
Stifel upgraded Snap from Hold to Buy after its shares fell over 25% since October, arguing that recent selloff has realigned valuation with growth prospects. The firm highlighted persistent user engagement above 375 million daily active users and improving ad pricing as key upside catalysts.
1. Stifel Upgrade Details
Stifel moved Snap’s rating from Hold to Buy, believing the stock’s sharp 25% decline since late 2025 more than reflects risks around user growth and advertising demand. The upgrade targets a price of $15, implying about 30% upside from current levels.
2. User Engagement Metrics
Snap reported over 375 million daily active users in Q4, a 12% year-over-year increase. Stifel noted that engagement trends remain strong despite broader social media headwinds, supporting potential monetization gains.
3. Advertising Outlook
Despite concerns around ad softness, Snap’s average revenue per user rose 8% in the latest quarter. Stifel expects continued improvements in ad pricing as the company rolls out new AI-driven targeting tools.
4. Valuation and Risks
At its current multiple of about 5x forward sales, Snap trades near two-year lows. Key risks include further ad market weakness and intensifying competition from Meta and TikTok, which could delay upside realization.