Snap’s stock price hard to justify: Barron’s

© Reuters. A stuffed ghost rests on a trader’s screen above the floor of the New York Stock Exchange (NYSE) after Snap Inc. listed their IPO in New York

NEW YORK (Reuters) – Snap Inc's (N:) share price looks overvalued following a surge in the wake of its much-anticipated initial public offering last week, according to an article in Barron's.

Shares of the messaging app company closed at $ 27.09 on Friday, well above its IPO price of $ 17 per share set on Wednesday. The owner of Snapchat, an app popular with young people for its disappearing messages, raised $ 3.4 billion in its IPO.

According to the Barron's article, Snap is valued at about 34 times its projected 2017 revenue of $ 1 billion, based on its enterprise value, while Facebook (O:) is valued at 10 times sales.

Even if strong growth is assumed, it is hard to justify more than half the current stock price, Barron's said.

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