Snap Stock Can't Take Advantage of TikTok Ban Talks

Analysts are overwhelmingly bullish on the equity

Deputy Editor
Sep 18, 2020 at 10:06 AM
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The shares of Snap Inc (NYSE:SNAP) are in focus this morning, alongside social media peer Facebook (FB) after it was reported that the U.S. Commerce Department plans to ban downloading Chinese-owned apps WeChat and TikTok. The ban is slated to begin on Sept. 20, but could be rescinded by President Trump before it takes affect. 

Despite a 2% premarket gain, Snap stock is down 0.5% this morning to trade at $24.13. On the charts, SNAP has nearly tripled from its mid-March lows, and even despite today's breather remain a chip-shot from its July 8 all-time high close of $26.41. Meanwhile, Snap stock's supportive 100-day moving average has captured any pullbacks over the last five months. 

Analysts are incredibly bullish on Snap stock, with 19 of the 29 in coverage calling the security a "buy" or better. Plus, the security's 12-month consensus price target of $26.27 is an 8.1% premium to current levels.

A short squeeze could be fueling the security's climb. Short interest fell 20.6% in the two reporting periods. Still, the 65.97 million  shares sold short represent a healthy 7.3% of SNAP's total available float,.

Options traders will be pleased to note the equity's Schaeffer's Volatility Index (SVI) comes in at 51%, which ranks in the 15th percentile of its annual range. Simply put, volatility expectations look quite muted right now on Snap stock, which may be enticing for those looking to buy premium


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