Meta Stock (NASDAQ:META)
One day before the highly anticipated release of the company’s earnings report for the fourth quarter, LightShed Partners initiated coverage of Meta Platforms (NASDAQ:META) with a Strong Buy recommendation on the Meta stock.
The Meta stock gained 0.8% in value early on Tuesday, putting it in a position of strength within the Communication Services sector.
However, sales should return to a rise in the first half of 2023 and accelerate throughout the year as “currency challenges abate” and the economy recovers. Greater Reels engagement raises the platforms’ appeal to ad buyers, analyst Rich Greenfield said. The business claims it is having trouble assigning value to the company’s investments in the metaverse; however, revenues should return to growth in the first half of 2023.
“We waited on the sidelines during COVID as the online ad industry surged back to life and, with it, Meta stock,” he added. “We saw the market for online advertisements come back to life.” “We then watched as it imploded over the previous year as concern built up about IDFA/ad-targeting headwinds, competitive pressure from TikTok, and most significantly, uncontrolled spending to develop Meta into the metaverse’s operating system,”
Why, then, is it called a “Buy now” button? Most of the things that caused the company concern have materialized over the previous three years. The company anticipates that its sales and profits growth will “meaningfully beat” projections in 2024 and 2025.
Its Buy rating may be broken down into four main categories: The level of engagement with Meta’s short-form video product Reels is on the rise; ad targeting is becoming better as a result of Meta’s Apple-inspired workarounds yielding fruit; Mark Zuckerberg, the CEO of Facebook, is showing investor awareness and has said that the company would “do everything is feasible to win”; Moreover, since there is a growing amount of interest in virtual reality, augmented reality, and mixed reality, “although we have no clue how to even begin assessing the potential of Meta’s investments in mixed reality,” we find it difficult to think that it is absolutely useless.
The firm has begun with a price target of $200 for one year, which indicates a 35% upside potential.
A recent expansion of Meta’s partnership with the NBA will make the latter’s more than 50 games available in virtual reality.
Featured Image: Google Images @ barrons.com