Snapchat parent's shares fall

Shares of Snapchat's parent company have fallen, with analysts saying they are drastically overvalued.

Shares of Snapchat's parent company have fallen 12 per cent on the third day of public trading. (AAP)

Shares of Snap fell 12 per cent on the Snapchat parent's third day of public trading, after opening up 4 per cent.

The pullback indicates profit-taking after investor gusto for Snap led to a huge run-up in the two days following its IPO on March 2. It also comes after Wall Street analysts warned that Snap shares are drastically overvalued, with none so far having issued a "buy" rating on the stock.

Snap shares closed down 12.3 per cent on Monday, to $US23.77 per share. That's below the $US24.48 closing price on the day of its IPO, but still well over the $US17-per-share initial public offering price.

Snap's stock is "like a lottery ticket," Needham & Co analyst Laura Martin wrote in a note to clients Monday, rating the stock "underperform."

While Martin noted that "sometimes lottery tickets do pay off," she detailed a litany of risks, including that Snap has "no clear path to profitability before 2020."

"Academic literature suggests that the sexier and more glamorous a company's IPO, the more likely it is to be overpriced at its IPO date and to suffer meaningful downwards earnings and valuation revisions in the first eight quarters after it goes public," Martin wrote.