Analyst Note| Ali Mogharabi |
While we’ve been expecting digital advertising to accelerate this year, Snap’s second-quarter results were still very impressive. Both the top and bottom lines easily surpassed our internal projections and FactSet consensus estimates. We have increased our fair value estimate to $74 (from $68) as we believe Snap continues to progress toward providing full-funnel offerings to advertisers of all sizes, which should help retain clients and drive higher ad spending by each. Snap executed well during the pandemic as it enhanced its direct-response offerings, whose growth is now accompanying the resurgence of brand advertising. Growth in Snap’s user count and user monetization were also impressive.