As 2019 draws to a close, Snap (NYSE: SNAP), the parent company of Snapchat, will look back at this year as the best since it became a publicly traded company in March 2017. Snap's shares have soared by more than 160% this year, and there are several reasons to think the company can continue on its dazzling upward trajectory.
First, Snapchat's user growth -- which has been one of the catalysts behind Snap's strong performance this year -- is projected to continue at a steady pace over the next few years. According to a report by eMarketer, the number of users on Snapchat will be 293 million by year-end, and the platform will boast 356.3 million users by 2023.
Second, the company is doing an increasingly better job of monetizing user engagement. During the third quarter, Snap's average revenue per user (ARPU) was $2.12, 33% higher than it was during the year-ago period. These factors (and others) recently prompted analyst Ron Josey to upgrade Snap's stock to a buy and assign it a $20 price target, which represents a 31% upside from its current levels.