Market Insider

Snapchat snags its first 'buy' rating; shares rise

One Wall Street firm has faith Snap is a good "buy"

Snap shares rose Monday after Wall Street finally gave the social media company its first "buy" rating.

Monness Crespi Hardt initiated coverage on the parent company of Snapchat with a "buy" rating and price target of $25. The parent company of Snapchat closed the day up a little more than 1 percent.

"We recognize we are potentially giving too much credit for unproven skills in building a business, rather than just a product, but we see more to Snap than many suggest," analyst James Cakmak said in a note to investors, noting the company has the potential to outpace the revenue growth of its peers.

Snap initially 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.

On Friday, Snap closed down nearly 2 percent, marking an 11.5 percent decline for the week. The stock fell 18.5 percent in the week that ended March 10.

On Thursday, Snap shares fell below $20 for the first time, nearing an IPO price of $17 per share, after it got hit with another sell rating.

Snap: 2 'buy', 6 'sells', 3 'holds'

Monness Crespi Hardt - (Buy)
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)
Mizuho - Neutral
Drexel Hamilton - (Buy)

—Reuters contributed to this report.

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