As previously reported, Morgan Stanley analyst Brian Nowak downgraded Snap (SNAP) to Underweight from Equal Weight, noting that Instagram (FB) competition is only increasing while the company’s pending app redesign creates further engagement and execution risks.

The company’s weaker than expected Q3 revenue and DAU growth show how its monetization and engagement challenges have been underappreciated and the chances of a turnaround have been overestimated, Nowak tells investors.

He cut his price target on Snap to $11 from $14, noting that its addition of only 4M new users last quarter was the fewest in a three-month period in the company’s history to the best of his knowledge.