On Monday, Snap Inc. (NYSE:SNAP) shares spiked 3.44% after Arete Research analysts raised the price target from $72.00 to $83.00 per share, citing increased marketing spending. The analysts believe the increase in ad impression prices, boosted by a higher budget on marketing spending could trigger significant growth.
Snap shares are up 51.80% this year and a whopping 260% over the last 12 months. However, Street analysts still expect more upward movement over the next 12 months with a consensus buy rating.
Should you invest in SNAP shares in Q3 2021?
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From a valuation perspective, Snap shares trade at a steep forward P/E ratio of 91.70, making the stock unattractive to value investors. However, analysts expect the company’s earnings per share to grow by 13.60% this year before spiking by a whopping 120.89% next year.
Therefore, despite the company’s premium valuation, growth investors could find the stock compelling, adding it to their portfolio. As a result, the Snap stock could maintain the current bull-run despite its12-month gains.
As such, it may not be too late to invest in SNAP shares.
Technical overview: SNAP stock price predictions for August 2021
Technically, Snap shares seem to have recently bounced off the ascending support trendline in the intraday chart. However, the stock is yet to hit overbought conditions of the 14-day RSI, leaving room for more upward movement.
Therefore, investors can target extended short-term gains at approximately $80.93. On the other hand, those targeting potential pullbacks can target profits at approximately $69.85 or lower at $63.58.
Bottom line: why buy the Snap stock rebound now?
In summary, although Snap shares have gained significantly this year and over the last 12 months, the current bull run seems to have the momentum to continue to the foreseeable future.
Furthermore, the Street analysts appear to have a consensus buy rating on SNAP stock, while rising ad impression prices boost long-term growth. Therefore, it may not be too late to invest in SNAP shares now ahead of next year’s exciting earnings growth.
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