Mark Zuckerberg and Elon Musk have yet to face off in the get-the-popcorn-out cage fight, but the Meta (NASDAQ:META) CEO appears to be getting under the Twitter owner’s skin without even entering the ring.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
The recent launch of Meta’s Twitter competitor Threads has seen Musk hitting the tweet button pretty regularly and he’s not happy about the latest addition to the Meta stable. Musk has already threatened to sue Meta, disparaged the new platform and has gone as far as saying “Zuck is a cuck.“
The fact Threads has already amassed over 100 million users in such a short amount of time is no laughing matter for Twitter and further adds to the microblogging platform’s woes.
It also represents a canny move on Meta’s part, taking advantage of the chaos engulfing Twitter since Musk took over last October. Rosenblatt analyst Barton Crockett calls it an “opportunistic targeting of potentially churnable users.”
“Clearly,” Crockett goes on to add, “Twitter’s turbulence under Elon Musk’s ownership — slashing staff, reducing content moderation, press reports of ad revenue down over 40%, various efforts to push a Twitter Blue subscription service, and new limits on the number of tweets users can view — has spawned controversy, whatever one thinks of their merits. This creates an opening for someone to move in and attack Twitter’s base. Meta is, at this point, the only scaled social media platform doing that.”
But more than just using the current situation to its advantage, over the long-term, Threads could also turn into a “high-margin, multi-billion-dollar opportunity.”
In October, Meta revealed that Instagram had surpassed 2 billion monthly active users (MAUs). If more than two-thirds of that user base consisted of daily active users (DAU), the potential audience for Threads (an app exclusive to Instagram users) could be nearly ten times larger than Twitter’s.
Moreover, Crockett reckons the rollout of Threads is being done at “modest cost,” during Zuckerberg’s “Year of Efficiency,” and makes use of existing infrastructure and “top flight ad sales (especially direct marketing) capabilities.” And while the current feature set is rather limited – just an app, no hashtag and no desktop tools “power users” are fond of – that will most likely improve over time.
All in all, Crockett maintains a ‘Buy’ rating on Meta shares and acknowledges the potential of the Threads opportunity, which leads to an upward revision of the price target from $263 to $333. This new target allows for an additional increase of 8% from the current levels. (To watch Crockett’s track record, click here)
Overall, most on the Street remain in META’s corner. The stock boasts a Strong Buy consensus rating, based on 35 Buys vs. 4 Holds. However, the $305.53 average target suggests a modest downside over the coming months. It will be interesting to see whether the analysts update their targets or change their Meta ratings shortly. (See Meta stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
