Snap (SNAP) Stock Forecast & Price Target

Snap demonstrated a robust financial performance in the third quarter of 2025, with sales increasing by 9.8% year-over-year to reach $1,507 million, exceeding guidance expectations. The company also saw a rise in global Average Revenue Per User (ARPU) to $3.16, marking a 2% year-over-year growth, alongside an increase in Monthly Active Users (MAUs) to 943 million. Notably, the strength in small and medium business (SMB) revenues, particularly a 25% year-over-year growth in North America, and the successful roll-out of premium services contributing to a 1 million subscriber increase for Snapchat+ highlight Snap's potential for continued growth.

The analysis indicates a negative outlook on Snap's stock primarily due to declining average revenue per user (ARPU), which fell -2% year-over-year to $2.77, and a downward revision of expected stock-based compensation, indicating less optimistic revenue projections moving forward. Furthermore, a forecasted decline of 3 million daily active users (DAUs) in the upcoming quarter is attributed to increased competition from short-form video platforms, regulatory challenges, and diminished user engagement, raising concerns about Snap's growth potential. Additionally, the anticipated slow growth rate of only 3% year-over-year in FY26, down from 4% in FY25, highlights ongoing difficulties in the North American market, which is essential for monetization, exacerbating the potential risks of macroeconomic headwinds and regulatory impacts.