#1 - Facebook (NASDAQ:META)
The case for Facebook (NASDAQ:FB) comes down to simple math. Prior to the social distancing initiatives caused by the Covid-19 pandemic, the combined usage on the company’s Facebook, WhatsApp, Messenger, and Instagram platforms was approximately 6.5 billion. That gives Facebook 449 million more users than YouTube.
Facebook is a social media giant. But a daily active user is not a statistic that Facebook can monetize. Getting on the social network is free.
And that’s the beginning of the bearish case against Facebook. The company generates 30% of their ad revenue from the film and travel industries. These are two of the hardest hit segments in the Covid-19 pandemic. The tech giant also generates a significant amount of its ad revenue from small businesses, some of which may not come back when the pandemic is over.
And that decline in ad revenue is why analysts from Cowen & Co are predicting that Facebook will have net revenue of $67.8 billion in 2020. That would mean Facebook will report negative year-on-year revenue for the first time since the company was founded in 2004.
But unlike other economic downturns, Facebook didn’t experience an organic decline in demand. It didn’t lose demand to other competitors. It had demand ripped from it. And that’s why it’s likely that the company will see demand come back when businesses begin to come back online.
Facebook stock is down over 15% in 2020.
About Meta Platforms
Meta Platforms, Inc engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately.
Read More - Current Price
- $430.75
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 40 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $513.43 (19.2% Upside)
