• Snap shares have almost doubled in value year to date.
  • Deutsche Bank analysts wrote that Snap’s third quarter performance suggested a “bonanza for online advertising.”
  • RBC has a $45 12-month price target on Snap

Shares of social media company Snap (SNAP) surged on Wednesday after posting unexpectedly strong third quarter results.

As of 3:04 p.m. EDT, Snap shares had jumped 30.19% to $37.04 per share. Snap shares have almost doubled in value since this point last year.

Snap, the owner of SnapChat, the popular multimedia messaging app, recorded an adjusted profit of 1 cent per share on revenue of $678 million for the quarter. Both figures exceeded Wall Street expectations.

Snap’s advertisement revenues, which were weak during the early stages of the pandemic, grew by 52% year-over-year in the third quarter.

“We saw the beginnings of a recovery from brand advertisers, and continued resilience from direct response advertisers, reinforcing our confidence in the long-term positioning of our business,” Snap Chief Business Officer Jeremi Gorman said in the company’s earnings call.

Analysts at Deutsche Bank analysts wrote that Snap’s third-quarter performance suggested a “bonanza for online advertising.”

The strength in Snap also pushed up other social media and tech stocks, including Pinterest (PINS), Facebook (FB), Google-parent Alphabet (GOOG) and Twitter (TWTR).

“Snap’s [third quarter] results, suggest that advertiser demand strengthened over the course of the quarter, particularly for smaller platforms like Pinterest, Twitter, and Snap,” Goldman Sachs said in a note.

"While there remains considerable uncertainty around advertiser demand and the sustainability of user engagement post-crisis, we believe the acceleration in revenue growth and engagement both pre-crisis and currently is representative of the underlying potential at Snap as the company continues to lean into product development, advertising technologies, and sales expansion," Goldman Sachs said.

Some other Wall Street analysts also think Snap shares can keep rising.

RBC has a $45 12-month price target on Snap.

“We think the significant investments in its core infrastructure have enabled Snap to accelerate its pace of innovation on the user side and advertiser side,” RBC stated.

JPMorgan has a $42 price target on the stock.

"Overall, we believe Snap's outsized [third quarter] results were a function of ad recovery, strong execution, [and] engagement growth. Importantly, Snap's brand-safe platform increasingly resonates [with] marketers during a noisy time for social media overall," JPMorgan said.