The analyst sees a "clear, strong catalyst path" towards upwards revenue and EBITDA revisions for Snap, supported by Snapchat+ creating incremental revenue, the advertising platform rebuild yielding strong performance results and driving growing advertiser adoption, the Amazon partnership, which the firm says could be material given the $20B a year Amazon spends on advertising, and growing contribution from inbound advertising from China.
Recent advertising checks give credence to a successful ad platform rebuild at Snap, evidenced by growing purchase related conversions, which supported a second sequential quarter of ad-spend acceleration from Q3 to Q4 and potentially a continued acceleration into Q1 of 2024, the analyst tells investors in a research note. The firm says this growth profile, coupled with easier compares, "could catalyze improving sentiment."
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