Dropping User Numbers Bad News For Snapchat

snapchat users

For the most part of 2017, Snapchat has seen a continuous decline in stock prices. JPMorgan seems to reach the conclusion now that those numbers will continue to fall in the coming days and weeks. Encouragement may be strong in the camp, but the concerns might just outweigh their ability to push forward in the coming weeks and months.

The target price range was recently lowered by ten percent, from twenty dollars a share down to eighteen dollars a share. A neutral rating, however, still stands for the company.

Previous expectations of how quickly users would join Snapchat, and in what numbers, are certainly not being met. With recent competition from Facebook and other messaging giants, the bank has decided to downgrade their base target price range.

JPMorgan has previously estimated that nearly ten million people would join Snapchat towards the second quarter of this year. That number has since been changed to eight million, and they are not ruling out the possibility that that number might even drop lower before all is said and done.

Profits are also under scrutiny, as JPMorgan has stated that they do not look for Snap, the company that owns Snapchat, to turn a profit until sometime in 2020. Strong spending growth for ads was seen about this time last year, revolving around the Olympics as well as the Election. Unfortunately, since those one-time events will not be repeating themselves, confidence in ad spending has decreased dramatically for the remainder of 2017.

While it is true that Snap released the Spectacles, which are capable of capturing video and sharing ten-second increments of your day on your Snapchat, in the EU earlier, the sales are not expected to have much of an impact on the overall bottom line for the company. Originally, Spectacles were expected to draw about $119 million in revenue, a number that has been cut in half, now standing at $56 million.

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However, this number could be pushed a bit by the fact that there is only one location at which to purchase these spectacles. Much like with Google Glass, which has since been discontinued, the lack of places to purchase them made people want them even more. Moreover, this could certainly end up being the case with Spectacles, as they are only available at a popup in downtown London, England.

After all, estimates are not a factual science.

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Editorial Staff

Editorial Staff at Downloadmessenger.org is a team of WordPress Marketing Experts led by Mary Anne. Page maintained by Mary Anne.

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