The logo for Snap Inc. appears above a trading post on the floor of the New York Stock Exchange, Wednesday, Feb. 7, 2018. Nearly a year after its initial public offering and lackluster growth, the company behind Snapchat is making a comeback, calming investor fears that the disappearing photo and video app is a mere has-been destined to get trampled by Facebook. (AP Photo/Richard Drew)

INTERNATIONAL – Snap “is quickly running out of money” and may need to raise capital by the middle of next year, according to a scathing new research report from MoffettNathanson.

In order to reach chief executive Evan Spiegel’s goal of profitability in 2019, Snap would need to grow “massively faster” than expected and cut costs aggressively, analyst Michael Nathanson wrote. 

He expects a loss of more than $1.5 billion (R21bn) in 2019 as Snap looks to rebuild its user base. And given increased competition from Facebook’s Stories format, Nathanson said it may be difficult to attract new users to Snapchat.

“We do not see Snap reaching profitability in the near future unless there are substantial expense reductions,” Nathanson wrote. “In 2019, Snap will have to make some moves to ensure it has the liquidity to stay in business.”

Nathanson cut his revenue estimates and lowered his price target on Snap to $6.50 from $8. He kept a neutral rating on the shares, saying short sellers had already made the “easy money” with the stock down 58 percent since its initial public offering in March 2017.

The shares fell 4.1 percent at 10:02 a.m. New York time. Snap did not immediately respond to an emailed request for comment before normal business hours.