Deutsche Bank analysts provided their outlook on Snap Inc. (NYSE:SNAP) ahead of the upcoming Q3 earnings, scheduled to be reported on Oct 21.

Since the layoff announcement in late August along with disclosure that revenue growth rebounded in August, investor sentiment has generally improved, with the stock outperforming the broader market by approximately 5-8%.

The analysts believe near/medium-term upside remains limited, due to the impact macro uncertainties could have on ad spend, particularly given the experimental nature of Snap's ad platform, the company's exposure to volatile categories (e.g. Crypto, Apparel, and Entertainment etc.) and potentially dilutive engagement shifts, both from a geographic and product perspective. Furthermore, the analysts noted they are also concerned about the recent departure of key advertising executives in this challenging macro environment, which could hamper the company’s effort to reinvigorate its ad business.