Snap falls as JMP downgrades, citing declining time spent in US
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Snap (NYSE:SNAP) shares fell nearly 2% in premarket trading on Tuesday as JMP Securities downgraded the social network and camera company, citing a decline in time spent in the U.S. 
Analyst Andrew Boone lowered the firm's rating on Snap (SNAP) to market perform from market outperform, noting the decline in time spent on the app is likely due to a "direct consequence of increased competition" from Meta Platforms (META) Reels and YouTube's (GOOG) (GOOGL) Shorts.
According to Sensor Tower, Boone noted that time spent on Snap in the U.S. fell 7% year-over-year in the fourth-quarter, a 7 point decline from the third-quarter, citing competition from Reels, YouTube Shorts as well as TikTok. 
"Importantly, these are Snap's most monetizable surfaces as we expect impression growth to be pressured looking ahead," Boone wrote in a note to clients.
Boone added that Apple's (AAPL) Identifier for Advertisers change to iOS is still impacting advertisers' targeting and attribution, likely impacting ad budgets on Snap (SNAP) and causing them to go to mid and upper-funnel objective.
"To that end, impression growth faces headwinds while macro represents additional downside risk as we are 4% below consensus for 2024 revenue," Boone added. 
The analyst added that if Snap (SNAP) were to push into recommendations and improve Spotlight, it could lower the company's gross margins, citing the heavy computing cost needed to do so.
Last week, investment firm Truist was cautious on Snap (SNAP) as spend on the platform grew just 2% year-over-year and had a "limited" presence at the Consumer Electronics Show.
Analysts are universally cautious on Snap (SNAP). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates SNAP a HOLD.