Snap's CFO is bolting. Here's what Wall Street is saying about a 'clear negative' for the company (SNAP)

• Snap shares plunged Wednesday after the company said CFO Tim Stone was leaving to "pursue other opportunities."
• The announcement marked the second CFO exit in eight months, and is the latest in a slew of key executive departures over the past year.
• The reaction from Wall Street analysts who cover Snap was largely negative. At least one firm lowered its investment recommendation on the stock.
• Watch Snap trade live.

Snap said late Tuesday its CFO was leaving the company, an announcement that sent the stock plummeting 12% on Wednesday.

Wall Street analysts largely saw the news as a negative development for the company, which has dealt in the last year with competition from Facebook's Instagram, backlash from its app redesign, and a string of notable executive departures. At least one firm downgraded the stock.

Snap said in a filing with the Securities and Exchange Commission that CFO Tim Stone intends to resign to "pursue other opportunities," and would stay on with the company to assist with finding a replacement. His last day has not yet been determined.

Stone's leaving marks the second CFO exit in eight months; Snap's prior CFO, longtime Amazon executive Andrew Vollero, left the company in May. Numerous key executives have left the company in the past two years, including its chief strategy officer, vice president of content, head of strategic partnerships, and vice president of global business solutions.

Stone's planned departure comes three weeks before Snap's quarterly and full-year earnings report. In the same filing late Tuesday, Snap said it expected to report both revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) results that are "slightly favorable to the top end" of its previously reported guidance ranges. Shares of Snap, meanwhile, have lost about 76% in market value since going public in March of 2017. 

Here's a summary of what some Wall Street analysts are telling clients about the departure:

JPMorgan

Price Target: $6

Rating: Underweight

"We view Tim’s resignation as CFO—after only 8 months on the job—as a clear negative," analysts led by Doug Anmuth told clients on Tuesday.

"We believe in his short time at Snap Tim implemented greater operational and financial discipline, with emphasis on moving Snap toward positive free cash flow and profitability."

They added: "Importantly, Tim’s departure suggests it will become even more challenging for Snap to recruit and retain high quality executives."

Anmuth and his team also said Snap shares would be under pressure, but believe a modest bull case has emerged for a "small number of investors focused around easier revenue comps in '19, engagement potentially bottoming out, and extremely negative sentiment."

RBC Capital Markets

Price Target: $8

Rating: Downgraded to "sector perform"

"Fundamentals have been very uneven since the company’s IPO," analysts led by Mark Mahaney told clients on Tuesday. "Our belief is that this has in part been due to severe competitive pressures (from FB), but also due to very uneven execution. Our hope had been that the May 2018 hiring of Tim Stone as CFO would help improve the company’s execution." 

They added: "With his relatively sudden departure, our confidence in a fundamental turnaround has been lessened."

Pivotal Research

Price target: $6

Rating: Hold

"Snap's CFO announced his resignation after a short time at the company, but at the same time the company reported positive financial trends, which complement the usage uptick we have observed in recent months through Nielsen’s DCR data," analyst Brian Wieser told clients on Wednesday.

Wieser viewed the positive financial trends of the Tuesday filing as "significant."