Shares of Snap Inc. were soaring over 10% on Thursday after an analyst said that marketers are “most bullish” they have ever been on the service.
Evercore ISI analyst wrote a bullish note on the company’s potential after recent talks across the ad industry and a strong fourth-quarter report from Facebook Inc.
Analyst Kevin Rippey wrote, “Conversations with marketers during the holiday season, were the most bullish we have ever heard on Snap.”
Facebook’s strong quarterly results on Wednesday make him “confident underwriting between 65% and 70% YoY revenue growth for Snap in the 4Q.”
A strong fourth quarter could be one step on Snap’s eventual path to upwards of $10 billion in revenue by 2025, said the analyst. The consensus forecast calls for $2.45 billion for 2020.
“We suspect the past few days’ weakness is a function hedge funds repositioning amidst the current short squeeze environment,” Rippey wrote.
“As such, we see this dislocation as temporary, and add SNAP to our Tactical Outperform List.”
Snap shares have gained 27% over the past three months. Rippey is the most optimistic projection among sell-side analysts.
Snap recently acquired a British artificial intelligence start-up called Ariel AI which focuses on augmented reality.
Ariel AI was founded in London in 2018 by a group of former Google and Facebook research scientists. The start-up’s website says that its software allows “3D human perception” in real time and that it can be used to power “the next generation of consumer experiences on mobile devices.”
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.