Snap Inc (NYSE:SNAP) and Alphabet Inc (NASDAQ:GOOGL) have secured buys from William Blair and Nomura- but which tech player stands to fare the best in the long-term battle for ad dollars? Whereas one analyst likes Snap’s potential to gear up as an advertising force among a strategic, young demographic, another analyst underscores slight cause for concern with Alphabet’s suddenly shaky tight rope walk amid global brand ad backlash. Let’s take a closer look:
Snap: The Platform Brands Need to Be Advertising On
Snap has divided many analysts on Wall Street since its IPO. Yet, William Blair analyst Ralph Schackart approaches the popular Snapchat app parent company with a bullish first impression, impressed with its “cool” factor among millennials, a bull’s eye from an advertising standpoint, as well as its robust social, video, and mobile ad budget growth prospects. As such, the analyst initiates coverage on SNAP with an Outperform rating without listing a price target.
As far as Schackart sizes up the new public company, “Snapchat Has What Brand Advertisers Want: Young Users,” elaborating, “By now, most advertisers we speak with know that Snapchat has a strong following among teenagers and millennials, who are becoming increasingly difficult to reach with TV advertisements. […] Given the importance of reaching this younger demographic, many brands see Snapchat as a platform they need to be advertising on.”
Considering that “Revenue [is] Just Beginning to Ramp Up, [with] Many Growth Drivers Ahead,” the analyst projects that by 2018, Snap could be circling $2 billion in revenue, indicating “a long runway for revenue growth” gleams ahead. “In the near term, we believe the largest contributors to revenue growth will be simply increasing the number of advertising clients and ads served,” continues the analyst.
Lastly, checking in with industry participants, Schackart highlights Snap’s competitive potential to steal…