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Snap's stock price hard to justify - Barron's
Written By Reuters
Published: | Updated:
Shares of the messaging app company closed at $27.09 on Friday, well above its IPO price of $17 per share set on Wednesday. The owner of Snapchat, an app popular with young people for its disappearing messages, raised $3.4 billion in its IPO.
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Traders work on the floor of the New York Stock Exchange (NYSE) while waiting for Snap Inc. will post their IPO in New York. Photo: Reuters
Snap Inc`s share price looks overvalued following a surge in the wake of its much-anticipated initial public offering last week, according to an article in Barron`s.
Shares of the messaging app company closed at $27.09 on Friday, well above its IPO price of $17 per share set on Wednesday. The owner of Snapchat, an app popular with young people for its disappearing messages, raised $3.4 billion in its IPO.
According to the Barron`s article, Snap is valued at about 34 times its projected 2017 revenue of $1 billion, based on its enterprise value, while Facebook is valued at 10 times sales.
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Even if strong growth is assumed, it is hard to justify more than half the current stock price, Barron`s said.
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