Moments after Snap opened officially for trading on the New York Stock Exchange with a 40 percent-plus surge from its IPO price, the hot technology company got its first official Wall Street analyst rating ... a sell.

Small research firm Pivotal Research Group slapped a sell rating on Snap shares and a $10 price target, below their $17-a-share offering price and far below the $24 price they opened at for trading late morning Thursday. The company is the first to issue a rating on the hot technology IPO, according to Factset.

Snap "is significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity," wrote Pivotal's Brian Wieser in the March 2 note. "Significant ongoing dilution from share-based compensation will likely represent an additional negative consideration for the stock."

Bigger research shops associated with banks are barred from issuing coverage on IPOs for which they were underwriters for a period of time after the offering. This is so they cannot be seen as influencing the price of the stock for their friends across the Chinese wall in investment banking. But independent shops like Pivotal are free to do so.

"Investors in Snap will be exposed to an upstart facing aggressive competition from much larger companies, with a core user base that is not growing by much and which is only relatively elusive," Weiser continues in the note. "It has a promising and innovative advertising offering, but so far it is still mostly unproven and difficult to quantify its ultimate scale."

Weiser told CNBC in an interview that the stock is being lifted by IPO euphoria alone.

There are people who bought the stock just "because they think the next person will pay more for it. That doesn't seem like a very sound way to invest in my view," he said.

Thirty minutes after it had opened for trading, nearly 100 million shares had already changed hands.

Pivotal also brings up Snap's controversial capital structure, which gives founders Evan Spiegel and Bobby Murphy majority voting power. The class A shares exchanging hands on the NYSE give buyers zero voting rights.

"Investors will also be exposed to what appears to be a suboptimal corporate structure operated by a senior management team lacking experience transforming a successful new product into a successful company," the note says.