Snap Inc (NYSE:SNAP) had a rough Monday as Wall Street analysts lowered their rating on the Snapchat-parent company due to its changes to the popular image-sharing app.
There’s a negative sentiment surrounding the app’s core users following the latest app redesign, according to at least one Wall Street firm. MoffettNathanson, which is a boutique shop that focuses in media and telecom, reiterated its sell rating on Snap following a survey that examined how users perceive the new look of Snapchat.
Analyst Michael Nathanson wrote a note to client that informed them of research conducted on the company. He said they hosted focus groups with three different cohorts, consisting of middle school students, high school students and young college graduate.
“Our first takeaway is that Snap’s redesign has clearly been a bust. All three groups were uniformly disapproving of it … A year ago Snap was widely described as ‘fun.’ This year, the key word was ‘annoying’,” he added. Nathanson and his firm reaffirmed their $10 price target on the stock, marking a 37% downside to Thursday’s close.
Nathanson also said that the focus groups were not fans of the new contacts page, while the Stories feature lost its own section. The app has also been increasing the frequency of alerts it sends users, while battery usage percentage for Snapchat fell 6 percentage points to 31% of all apps for middle school students compared to a year ago.
SNAP shares were plummeting about 8.2% on Monday, now selling at around $14.57 per share.
