Traders gather at the post where Snap Inc. is traded on the floor of the NYSE
NEW YORK (Reuters) - Snap Inc's <SNAP.N> share price looks overvalued following a surge in the wake of its much-anticipated initial public offering last week, according to an article in Barron's.
Shares of the messaging app company closed at $27.09 on Friday, well above its IPO price of $17 per share set on Wednesday. The owner of Snapchat, an app popular with young people for its disappearing messages, raised $3.4 billion in its IPO.
According to the Barron's article, Snap is valued at about 34 times its projected 2017 revenue of $1 billion, based on its enterprise value, while Facebook <FB.O> is valued at 10 times sales.
Even if strong growth is assumed, it is hard to justify more than half the current stock price, Barron's said.
(Reporting by Lewis Krauskopf; Editing by Nick Zieminski)