Morning Summary - Jun 18 2026

Research evidence excerpt

Morning Summary - Jun 18 2026

MORNING SUMMARY

June 18, 2026

Key Message: We are maintaining our NEUTRAL rating on Snap shares and lowering our price target to $5.00 (vs. $6.50 prior) reflecting a more conservative

revenue and operating profit outlook for the core Snapchat business through 2028 and incremental concern that investment in Specs will exceed current

investor estimates. On June 16 the company unveiled the Specs wearable computer built into augmented reality glasses, with the product slated to go

on sale Fall 2026 in the US, UK and France at a $2,195 retail price. Specs is an ambitious product that has been thoughtfully designed with over 7,000

patents filed, but which remains heavily in investment phase with limited details on production, cost and functionality. We estimate that the company invested

~$500mm in Specs development over the past 12 months, and that net investment is likely to increase well into the commercial rollout period. We see

longer-term optionality in the ability to develop a leadership position in wearable AR technology but expect the market will approach the product with caution

pending incremental details on long-term cost and demand potential. Our outlook for core 2Q results remains largely unchanged (DAU declines of 1mm in

both North America and Europe, more than offset by Rest of World growth) and 2Q revenue of $1.54bn at the guidance midpoint (4.8% advertising, +80.1%

subscription growth). While we believe the advertising environment has remained relatively stable since 1Q earnings, ongoing softness in CPG verticals

(incorporated in 2Q guide) tempers our multi-year advertising revenue growth forecast. Our 2Q Adjusted EBITDA estimate of $195mm remains at the high-

end of management guide and implies margin expansion of +970bps y/y.