Is SNAP a buy right now?

He feels the company made forward progress in its recent quarterly results, but Roth MKM analyst Rohit Kulkarni wants to see more from Snap (Snap Stock Quote, Chart, News, Analysts, Financials NYSE:SNAP).

On April 25, Snap reported its Q1, 2024 results. The company posted Adjusted EBITDA of $46.0-million on revenue of $1.2-billion, a topline that was up 21% over the same period a year prior.

“The value we provide our community and advertising partners has translated into improved financial performance,” CEO Evan Spiegel said. “Our large, growing, and hard-to-reach community, brand-safe environment, and full-funnel advertising solutions have made us an increasingly important partner for businesses of all sizes.”

The analyst weighed in on the quarter.

“Snap’s clean beat 1Q results and upbeat 2Q guide reinforced our near-term thinking, as we held an incremental positive bias heading into earnings,” he wrote. “Snap’s progress in attracting SMB advertisers and growing its DR business deserves applause, and recent macro recovery in brand-related ad spend seems to be benefiting Snap. However, Snap’s AI infrastructure investments remain high, leading to negative op. margins and low gross margins. We have an incremental positive bias on SNAP though remain Neutral until we see durable cost structure.”

In a research update to clients April 26, Kulkarni maintained his “Neutral” rating but raised his price target on SNAP from $14.00 to $15.00.

The analyst thinks the company will generate EBITDA of $421.3-million on revenue of $5.38-billion in fiscal 2024. He expects those numbers will improve to EBITDA of $874.7-million on a topline of $6.22-billion in fiscal 2025.