Snap shares plunged 14% today after the Snapchat-owner posted its second quarter of user losses in a row and forecast further declines, a boost for Facebook's Instagram ahead of its results next week.
At least four Wall Street analysts cut their price target as Snap's much-criticised app redesign continued to weigh on daily active user numbers (DAU), particularly in Europe and the US.
A revelation for teenage users and 20-somethings worldwide when its vanishing-post model was first launched in 2011, Snap's user growth has stalled in the past two years as Instagram mimicked its best features.
Its 186 million users in the third quarter compares to the Facebook-owned app's more than 1 billion.
A redesign at the start of this year aimed at rebooting the app spurred a backlash led by celebrity users including Kylie Jenner, who threatened to boycott the photo-messaging app.
Snap's DAUs have now declined by five million since the first quarter, which the company blamed mainly on the Android app rollout.
With the company anticipating further declines, analysts fears these losses could spill over to 2019.
Snap shares have fallen more than 50% this year, while Facebook's, hurt by the fallout of the Cambridge Analytica privacy scandal, have lost about 14%.
Analysts have said the number of advertisers active on Snapchat, though small, have been steadily growing. However, the social media app is still at the mercy of its user count.
