TLDR
- Redburn Atlantic raised Snap to “Buy” with a $10 price target, up from $5
- Snapchat+ subscription revenue projected to surge from $700M to $1.75B within three years
- Company expected to achieve GAAP profitability by 2026
- Cost optimization and AI integration forecast to lift gross margins beyond 60%
- Despite Monday’s rally, SNAP remains down approximately 25% in 2025
Shares of Snap (SNAP) surged approximately 7-8% during Monday’s trading session following an upgrade from Redburn Atlantic, which elevated the stock to “Buy” and increased its price target from $5 to $10.
The new $10 price objective represents approximately 65% potential upside from SNAP’s trading level prior to the announcement.
This wasn’t simply a rating change — Redburn’s upgrade included a comprehensive investment thesis explaining why the social media platform appears poised for a turnaround.
The core of Redburn’s bullish stance revolves around Snap’s evolution beyond pure advertising dependence. Although digital advertising remains the primary revenue source, the research firm highlighted the rapidly expanding Snapchat+ premium subscription offering as a critical growth catalyst.
Analysts project subscription revenue will more than double across the coming three-year period, climbing from approximately $700 million to $1.75 billion. This trajectory would increase subscriptions’ contribution to total revenue from 13% to 22%.
This type of stable, recurring income stream represents a significant transformation for a business that has historically been vulnerable to the volatile digital advertising landscape.
Path to Profitability Emerging
Redburn’s analysis also emphasized improved financial discipline as a cornerstone of the investment case. The company is believed to have achieved GAAP breakeven status in the previous year — when excluding its experimental Spectacles hardware division — with projections pointing toward “meaningfully profitable” operations by 2026.
Reaching sustained profitability would mark a critical inflection point for a company that has faced persistent challenges generating positive earnings since its 2017 initial public offering.
Substantial workforce reductions combined with a strategic transition toward AI-powered operations are anticipated to drive gross margins above the 60% threshold. Redburn characterized this evolution as Snap finally transitioning into a more efficient, earnings-focused enterprise.
Monday’s price surge pushed SNAP toward testing its 100-day moving average resistance level. Market technicians observed that a convincing break above the $6.20 level would indicate a potential shift in long-term momentum favoring bullish traders.
The stock momentarily surpassed several important technical thresholds, attracting interest from momentum traders searching for signs of a sustained trend reversal.
Current Market Position
Notwithstanding Monday’s strong performance, Snap shares remain down approximately 25% for the year-to-date period and continue trading roughly 41% beneath the 52-week peak of $10.35 reached in July 2025.
An investor who allocated $1,000 to SNAP five years ago would currently hold a position worth around $100.
The broader Wall Street analyst community maintains a more cautious stance compared to Redburn. The consensus recommendation currently stands at “Hold,” although the average price target of approximately $7.99 still suggests over 30% upside potential from present levels.
SNAP has experienced single-day moves exceeding 5% on 26 different occasions throughout the past year, underscoring the stock’s inherent volatility.
While Redburn’s upgrade represents the most optimistic Wall Street call on the stock in considerable time, this perspective has not yet gained widespread acceptance among the broader analyst community.
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