Snap's stock price hard to justify - Barron's

Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) while waiting for Snap Inc. will post their IPO in New York, U.S., March 2, 2017. REUTERS/Lucas Jackson

NEW YORK (Reuters) - Snap Inc's 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 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)