The launch of Twitter’s rival Threads by Metaverse company Meta Platforms (NASDAQ: META) has caused a ripple among social media platforms. However, even as the battle between Mark Zuckerberg‘s Threads and Elon Musk‘s Twitter turns toxic, with Twitter threatening to sue Threads, the new app still has a lot of catching up to do when it comes to competing with Twitter. Meta’s head of Instagram, Adam Mosseri, admitted in his post on Threads that the new app has “tons of basics that are missing,” including search capabilities, hashtags, and a following feed.
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Mosseri also addressed some operational concerns raised by some users regarding the new app. He stated that many users had complained that they were unable to delete their Threads account without first deleting their Instagram account. He added that the company was still working on this issue and is “looking into a way to delete your Threads accounts separately.”
META is also looking at sorting out the issue of the lack of chronological feeds, Mosseri added.
Meanwhile, Wells Fargo analyst Ken Gawrelski expects that the impact of Threads could be limited over the short term but could boost META’s revenues over the long term. The analyst stated in a note to investors, “Framing imminent launch of Instagram Threads, we see [opportunity] for incremental revenue and EPS contribution at maturity between 1-3% annualized.”
Over an annualized basis, Gawrelski anticipates that Threads could add $0.13 to $0.64 per share to META’s earnings, assuming it is monetized in the U.S., as it is unclear when it will be launched in Europe, and monetization in the rest of the world remains “limited.”
The analyst has a Hold rating and a price target of $313 on the stock, implying an upside potential of 7.7% at current levels.
Overall, analysts are bullish on META stock, with a Strong Buy consensus rating based on 36 Buys and four Holds.
