Investing.com - Truist Securities maintained a Hold rating on Snap Inc (NYSE:SNAP) and kept its $8.00 price target on the stock. The shares currently trade at $6.05, below InvestingPro's Fair Value of $7.95, suggesting the stock may be undervalued.
The company pre-announced first-quarter 2026 results that came in slightly ahead on revenue and materially ahead on the bottom line. Snap announced a 16% global headcount reduction set to take effect immediately.
Truist noted the headcount reduction highlights Snap's push to accelerate GAAP profitability, which has been a key demand for investors including a recent activist earlier this month. The firm said it is encouraged by the prospects of margin expansion as lower headcount and AI integration should help drive near-term profitability. InvestingPro data shows analysts predict the company will be profitable this year, with EPS forecast at $0.48 for fiscal 2026, a sharp turnaround from the -$0.27 loss over the last twelve months.
Truist said it remains on the sidelines as the company continues to lose share to peers like Meta and Reddit. The firm also cited management's efforts to drive user growth and monetization in its most important markets.
Truist said it will review its model and valuation when the company reports full earnings results on May 6. For deeper analysis, SNAP is among the 1,400+ US equities covered by comprehensive Pro Research Reports, which transform complex data into actionable intelligence.
In other recent news, Snap Inc. announced significant restructuring measures, including the elimination of approximately 1,000 positions, representing 16% of its workforce, and the closure of around 300 open roles. This move is expected to generate roughly $500 million in annualized cost savings, although it will incur a pre-tax severance charge of $95 million to $130 million. BMO Capital has responded by raising its price target for Snap to $15, maintaining an Outperform rating, citing the company's cost-cutting measures and AI-driven efficiencies. Meanwhile, Wolfe Research reiterated a Peerperform rating following the restructuring announcement.
In contrast, Stifel has lowered its price target for Snap to $4.50 from $5.50, expressing concerns about the impact of advertising budget cuts on smaller social media platforms like Snap. In other developments, Snap has entered into a multi-year strategic partnership with Qualcomm Technologies to develop smart glasses powered by Snapdragon system-on-a-chip technology. This collaboration is part of Snap's efforts to launch advanced eyewear through its subsidiary, Specs Inc., integrating digital experiences into physical environments. These recent developments highlight Snap's strategic efforts to streamline operations and explore new technological ventures.