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As of 2023, meta stocks are up more than 20%.
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Just one day before the fourth quarter earnings report,
meta platform
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Analyst Richard Greenfield has set a buy rating and a $200 price target on the social networking giant’s stock.
Meta shares rose 0.4% to $147.66 in recent trading on Tuesday.
Meta Stocks (NYSE: META) have been volatile in recent months. It fell sharply on the company’s third-quarter earnings, which it reported in October, but rebounded weeks later after it announced plans to cut 11,000 jobs. rising.
Meta has addressed multiple issues. Advertising competition with TikTok has intensified,
Amazon.co.jp
(AMZN),
netflix
(NFLX) etc.Ongoing targeting and measurement issues
apple
(AAPL)’s strict stance on privacy. and a slowing macroeconomic environment. We face ongoing regulatory scrutiny from the European Union, the Federal Trade Commission, and other government agencies. Investors also remain skeptical about the company’s ambitious cost of building the metaverse.
But in Tuesday’s blog post, Greenfield cites four reasons why Meta’s earnings and earnings growth could outpace market expectations in 2024 and 2025.
For starters, he wrote, user engagement on Reels, the company’s short-video TikTok clone, is “exploding.” Greenfield claims TikTok’s decline in market share appears to be slowing, especially among older users of his Meta.
“As the economy recovers in 2024, we expect advertising growth to accelerate significantly as reel monetization is currently still in its early stages,” he wrote.[Reels] With a platform that has been constantly evolving since its inception, we can attest to Zuckerberg’s second most impressive turnaround (after mobile). ”
Additionally, Meta is recovering from Apple’s data privacy changes to improve its ability to target ads, analysts said. Another factor, he says, is what he calls his CEO Mark Zuckerberg’s “investor mindset.”
“We expect 2024 and 2025 margins to improve significantly beyond what investors currently expect. because we learn to cut back even on spending on ,” he wrote.
In particular, he’s more optimistic than many about the prospects of the Metaverse, adding that it’s “hard to believe it’s completely worthless.” Still, Greenfield estimates that by 2025, operating losses related to the company’s Metaverse investment will exceed his $75 billion.
“I believe that by 2025 we and our investors will have some understanding of how the metaverse will turn into a business,” he wrote. If nothing happens in a few years, I believe investors will force Zuckerberg to scale back his grand vision in a meaningful way.”
Write to Eric J. Savitz at eric.savitz@barrons.com.
