Morgan Stanley analyst Brian Nowak slashed his Snap Inc. SNAP, -1.97% price target to $5 from $7 on Thursday, while decreasing his estimates for the company's daily active counts over the next few years. "At a high level, we expect Snap's smaller user base to be a further headwind to revenue growth (fewer eyeballs, ad impressions, and time to monetize)," he wrote. "In addition, our latest industry conversations continue to point to ad performance and monetization challenges around the 'Stories' format across the ecosystem (Instagram, Facebook, and Snapchat.)" He's heard that some advertisers are moving dollars away from Snap and onto Facebook Inc. FB, -0.89% properties due to the social media giant's reach and targeting technology. Nowak doesn't think that Snap can cut costs enough to make up for its shortcomings elsewhere and predicts that the company won't generate positive free-cash flow until 2022. Snap's stock is down 0.2% in Thursday morning trading.