Snap Inc. (NYSE: SNAP) has discontinued the development of its flying selfie camera, Pixy, The Wall Street Journal reported, citing people with knowledge of the matter. The move, which comes less than four months after the launch of the drone, forms a part of the California-based company’s decision to reprioritize its resources.
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Pixy is a small flying camera that people can use for taking selfies or recording videos. It is designed to take off and land on the hands of its user. With a starting price of $230, the current version of the drone is available online.
The decision to halt Pixy’s development follows the social media company’s second-quarter results. Even though Snap reported a 13% rise in quarterly revenues, it posted an adjusted loss of two cents per share against a profit of 10 cents in the same quarter a year ago.
The CEO of Snap, Evan Spiegel, said, “While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect our ambition. We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth.”
Is Snap a Buy or Hold?
According to TipRanks, SNAP stock has a Hold consensus rating, which is based on 10 Buys, 22 Holds, and four Sells. Snap’s average stock price prediction of $14.93 implies upside potential of almost 19%.
One of the analysts with a Buy rating on SNAP is Justin Post of Bank of America Securities. On August 16, he maintained a Buy rating on the stock with a $22 price target (75.2% upside potential).
Post said, “Snap’s valuation at below 4×2023 revenues (which is similar to the Pandemic valuation bottom in 2020) factors in risks that 2023 revenue will miss, with little optimism on upside potential.”
Just like analysts, bloggers, too, are cautious and have a Neutral stance on SNAP.
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