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Investment firm Cantor joins chorus against Snap

Equity investment firm Cantor Fitzgerald initiated coverage on Snap as "underweight" Tuesday, saying the social media company has the potential to be the next Facebook — or the next Twitter.

Shares of the Snapchat parent company were down more than 2 percent in premarket trading on Wednesday. The stock later reversed and ended the day about 0.9 percent higher, amid a rally in the broader market.

"Sequential DAU and monetization growth throughout 2017 will be key in determining the growth curve of Snapchat, and whether it's more likely to mimic Facebook in its user/advertiser appeal or Twitter," Cantor's Youssef Squali said in a note to investors, giving the company a price target of $18.

Cantor also said it based the rating on the company's current valuation, which it said was "rich under most scenarios," an "unproven model with marketers," and an untested management team.

The social media platform has had mixed reactions from Wall Street and has yet to receive a "buy" rating from any analyst listed in FactSet.

Snap: 5 'sells', 3 'holds'

Needham - Underperform (Sell)
Atlantic Equities - Underweight (Sell)
Morningstar - (Sell)
Aegis - (Hold)
Susquehanna - (Hold)
Nomura Instinet - Reduce (Sell)
Pivotal Research - (Sell)
CFRA Research - (Hold)
FBN Securities - Sector Perform
Cantor - Underweight