Facebook Investors Need Not Fear Snap, Analysts Say

By Caitlin Huston Markets MarketWatch Pulse

Facebook investors can rest easy as Snap does not appear to be as much of a competitive threat as expected, said Nomura analysts. The analysts say Snap is "unlikely to negatively affect Facebook's growth trajectory in a direct way" as the company's prospectus showed a deceleration in average revenue per user in the fourth-quarter as well as decelerating user growth in the second half of 2016, which came after Facebook launched Instagram Stories. Though there is not a direct comparison, Facebook engagement appears to be strong, with the company reporting 50 minutes per day spent on its sites, compared to Snap's disclosure of younger users spending 30 minutes a day on the app. Shares of Facebook were up 0.5% Monday. Facebook shares have gained 8.9% in the past three months, compared to the S&P 500's gain of 9.8%.

Continue Reading Below

Copyright © 2017 MarketWatch, Inc.