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Shares of Snap fall below $20 for the first time

The parent company of Snapchat just got hit with another sell rating, and shares are tanking.

With the company's IPO in the rear-view mirror, MoffettNathanson said it initiated coverage on Snap with a sell rating Thursday, saying the market has now priced the company for perfection.

Snap shares fell below $20 for the first time Thursday, closing the day down more than 4 percent and nearing an IPO price of $17 per share.

"As a result, we believe its current valuation 'bubble' at 7X 202 EV/revenue is set up more for a [Twitter] like pop over the next year than a steady rise from today's levels," analyst Michael Nathanson said in a note to investors, giving the company a target price of $15.

The firm cited risks such as slowing daily average user growth, limited revenue and profitability. "SNAP's income statement is going to look a lot more like [Twitter] than [Facebook]," Nathanson said.

Snap has raised some eyebrows on Wall Street, with analysts flagging the company's slowing user growth, widening losses and lack of voting rights for outside investors.

Snap: 6 '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
MoffettNathanson - (Sell)

—Reuters contributed to this report.

(Disclosure: CNBC parent NBCUniversal is an investor in Snap.)

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