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Snap CEO Evan Spiegel
- Snap, Snapchat's parent company, exceeded Wall Street's expectations on Tuesday.
- The social media company reported a smaller quarterly loss than was forecasted, and revenue also topped expectations.
- Shares soared more than 20% the results.
- Investment firms were mostly upbeat on the results. Snap pre-announced last month that guidance would come in "slightly favorable to the top end" of the company's previous forecast.
- Watch Snap trade live.
Wall Street was quick to heap praise onto Snapchat's parent company, Snap, after the social-media platform reported fourth-quarter results that exceeded expectations. The report led analysts on Wednesday to wonder whether the troubled stock had reached an inflection point, though many cautioned any kind of turnaround was in its early stages.
Snap's quarterly loss on Tuesday came in smaller than was expected, and its sales also topped consensus expectations, sending the stock soaring more than 22% early Wednesday to $8.65 a share. Analysts were also encouraged by the Snapchat app's daily active user count - a key measure of the app's health - stabilizing in the fourth-quarter after two quarters of declines.
The company had already announced in a filing last month - when it also said its CFO would leave the company - that its revenue and adjusted EBITDA numbers would come in "slightly favorable to the top end" of its prior guidance.
Read more: Snap's stock jumps 17% after its Q4 beats Wall Street's expectations
The results drew at least six analysts tracking the stock to raise their price targets, though all were well below the company's initial public offering price of $17 a share. The average price target on Snap is now $8.35, according to analysts surveyed by Bloomberg.
Still, while analysts lifted their price targets far and wide, less common were changes in their investment recommendations. Analysts like Mark Mahaney at RBC Capital Markets and Doug Anmuth at JP Morgan, who both bumped up their price targets, maintained their "sector perform" and "underweight" ratings, respectively.
"Though these were encouraging results, one quarter doesn't make a trend and we remain Underweight as we look for further signs of improvement in the business," Anmuth told clients on Wednesday.
Meanwhile, a more cautious analyst, SunTrust's Youssef Squali, maintained both his $8 price target and "hold" rating. Squali said the quarterly results pointed to "sustained advertiser demand, stabilization in user growth and better cost containment."
He added: "That said, lack of visibility into DAU growth re-acceleration (likely post the full Android app re-launch), timing of break-even and valuation keep us on the sidelines."
Here's a summary of what other Wall Street analysts are telling their clients about Snap's latest report:
Get the latest Snap stock price here.