RiverPark Advisors Latest Thoughts on Snap (SNAP) Stock

RiverPark Advisors, LLC an independently-owned investment firm, recently published its first-quarter RiverPark Long/Short Opportunity Fund commentary – a copy of which can be downloaded here. During the first quarter of 2020, the RiverPark Long/Short Opportunity Fund returned 9.48% (institutional shares), compared to the total return of -19.60% by the S&P 500 Index.

In the said letter, RiverPark Advisors highlighted a few stocks and Snap Inc (NYSE:SNAP) is one of them. Snap is a social media company based in California. Year-to-date, SNAP stock gained 6.1% and on May 6th it had a closing price of $17.33. Its market cap is of $25.05 billion. Here is what RiverPark Advisors said:

“Snap is known for its mobile-only picture and messaging application Snapchat. Snapchat reaches 90% of 13-24-year-olds in the US and has 218 million Daily Active Users who spend about 30 minutes/day on the platform producing more than 10 billion daily video views.

We expect SNAPs average revenue per user (ARPU) to grow from its current $8 per year to more than $20 by 2023. For reference, Facebook generates a $50 ARPU and Twitter $25. Increasing users, engagement and ARPU should drive a 35% revenue CAGR through 2023, as well as expand gross margins from 56% for 4Q19 to 80%. We believe that the combination of continued strong growth in user engagement with increasing monetization will lead to a period of sustained and highly profitable growth for the company over the next several years.”

Disclosure: None. This article is originally published at Insider Monkey.