Snapchat Shares get a Wall Street upgrade after falling to post-IPO low

Stifel, the Wall-Street firm upgraded Snpachat-parent Snap Shares to buy from hold last week after the Stock hit a new low since its March IPO. Stifel is now one of the minority of Wall Street firms with a positive outlook on Snap.

Shares jumped 2.9% to $15.69 following the upgrade. The stock hit a record low of $15.21 last Wednesday, well below its initial public offering price of $17. User retention and growth have been big concerns for investors regarding Snap, especially with social media giant Facebook putting more pressure on the firm.

According to analyst Scott Devitt, some of the worries surrounding Snap could be overblown:

“Competition from Instagram remains a concern for investors, though recent app download trends appear healthy in key ad markets, leading us to believe near-term risks to revenue-generating may be overstated. Despite concerns in the market and persistent comparisons to Twitter, we believe Snap’s business remains on track fundamentally as it continues to develop innovative consumer products and increasingly sophisticated tools for advertisers.”

The Stock, which has fallen for the past eight sessions, has also been hit on fears of impending massive insider selling when at least an estimated 950 million Shares in the recent IPO become available for sale later this month.

In May, Facebook CEO Mark Zuckerberg told analysts that Instagram Stories had 200 million daily active users. By comparison, Snap had 161 million daily active users at the end of last year.