Snap (SNAP) is expected to report results on its fiscal quarter on Thursday, April 21, with a conference call scheduled for 5:00 pm EDT. What to watch for:

Q2 GUIDANCE CONCERNS: On Wednesday, Jefferies analyst Brent Thill lowered the firm's price target on Snap to $52 from $60 but kept a Buy rating on the shares as he offered a preview of earnings from the digital advertiser group. His digital ad checks support in-line to slightly above street revenue growth for the sector for the first quarter, and he expects a Q1 revenue beat from Snap, but he has some concern about the company's second-quarter guidance given the uncertain macro backdrop and a tough comp.

Earlier this week, Credit Suisse analyst Stephen Ju also cut his price target on Snap to $88 from $93, while keeping an Outperform rating on the shares ahead of the company's first-quarter results. The analyst said that while his Q1 revenue estimate remains at the mid-point of the $1.03B-$1.08B guidance range, his channel checks indicate upside potential as advertisers seem to be adding more mid-funnel campaigns, along with strength in certain verticals including media/entertainment, e-commerce and increasingly travel. Competition from a "long list of well-heeled" global competitors and a re-emergence of COVID-19-related budget headwinds are risks to estimates, Ju told investors in a research note.

BUY SNAP: On Tuesday, Citi analyst Ronald Josey upgraded Snap to Buy from Neutral with a price target of $50, up from $41, after assuming coverage of the internet sector. The analyst's top picks in the internet sector are Amazon (AMZN), Snap, Airbnb (ABNB), and DoorDash (DASH), as he believes they are all leaders in their respective categories that continue to innovate with newer products and services by improving people's lives through convenience, social/entertainment, or travel. The broader sector is "healthy" as consumer engagement online continues to be more immersive and grow, say Josey, who sees "multiple vectors ahead for sustained growth."

Meanwhile, Rosenblatt analyst Barton Crockett also initiated coverage of Snap with a Buy rating and $49 price target. While user growth is scarce lately at social media companies such as Meta (FB) and Pinterest (PINS), that is not the case at youth-focused Snap, whose resilient user growth makes it "uniquely investable" among the group, Crockett argued.

POCKETS OF USER GROWTH OPPORTUNITY: Earlier this month, Piper Sandler analyst Thomas Champion reiterated an Overweight rating on Snap with a $53 price target following an analysis of the company's addressable users. The exercise suggests "compelling pockets of user growth opportunity" in nations like Mexico, Brazil, Italy and Spain, Champion told investors in a research note. All in, he estimates 800M-plus addressable monthly active users across the top 15 GDP countries alone for Snap. Champion now holds greater conviction in his above-consensus daily active user forecasts for Snap, which are 4% above Street in 2025.

OUTLOOK: During the company's last earnings call, Snap said it saw first quarter revenue of $1.03B-$1.08B, with consensus at $1.07B. The company also said he saw daily active users between 328M-330M in the first quarter, and to be approximately breakeven on adjusted EBITDA.