Snap’s user growth will be weaker than expected, according to one Wall Street firm.

Deutsche Bank on Monday lowered its rating for Snap shares to hold from buy, citing the competitive threat of larger internet firms.

“After broad conversations across the ad ecosystem over the last month, feedback was decidedly mixed,” analyst Lloyd Walmsley wrote in a note to clients. “Facebook’s efforts to copy Snap’s product (on a best-in-class ad platform) has also somewhat obviated the imperative some had around Snap a year ago; many feel they can get the key younger audience via Instagram.”

Snap shares have been extremely volatile since its IPO. The stock declined 48 percent from its high, reached days after the company went public on March 2. It is also down 10 percent from the $17 IPO price, but up 36 percent from its all time low in mid-August.

Walmsley reduced his price target for Snap to $17 from $20, representing 11 percent upside from Friday’s close.

The analyst cited how he talked to Snap’s content and technology partners, along with advertisers in recent weeks.

“Marketers are just not as interested in Snap. The exciting new platform buzz seems to have shifted to Amazon of late,” he wrote.

As a result, Walmsley lowered his net daily active users (DAU) quarter-over-quarter growth estimate for the September quarter to 4.5 million from 7.5 million.

“We continue to see an attractive LT opportunity given product innovation and improving ad tech,” he wrote. “But we believe new products may take longer to improve the DAU trajectory, and note a reduced imperative for advertisers to experiment with Snap advertising.”

Snap did not immediately respond to a request for comment.

— CNBC’s Michael Bloom contributed to this story.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.