Facebook Inc (FB) Messaging Could Bring $10 Billion in Revenue, Says Top Analyst

Advertising Week presentations bode well for Facebook's future in the business-to-consumer sphere.


After making an appearance at various Advertising Week presentations in New York, Aegis analyst Victor Anthony is out with a confident research note on the future of Facebook Inc (NASDAQ:FB): a future that will soar thanks in large part to the social media titan’s prospects with messaging. Calling messaging a “new paradigm” for corporate communication and interaction on the consumer front, the analyst believes Facebook is ready to tap into a multi-billion-dollar revenue opportunity.

On the heels of Advertising Week, the analyst maintains a Buy rating on FB stock with a $200 price target, which represents a just under 19% increase from current levels.

To provide some context back to the late 1800’s, Anthony points to Facebook’s Vice President of Messaging Products, David Marcus, who detailed the evolution from the pony express; to railway mail; to the telephone as primary business communication; to telemarketing campaigns in the 1950s; to the infamous 1-800 numbers of the late 1960s; to the first email of 1971; to the world wide Web we know in its early ’90s days; to text messaging before it became ubiquitous throughout the globe in 1992; to short code, which “enabled businesses to send urgent messages to customers” by 2003. “In each instance of this evolution,” highlights Anthony, “the method of business-to-consumer interaction was profoundly changed.”

Glancing ahead, the analyst details the writing on the technological wall; one that could certainly prove advantageous to this titan: “Today, and for the foreseeable future, the Facebook reps believe that messaging is evolving as the primary way in which consumers and businesses will interact with product sales, customer service, and customer support. Messenger is already seeing heavy B2C use within the travel, beauty, and e-commerce verticals.”

With 70 million businesses favoring Messenger, and 18 million active monthly, based on a survey polled throughout 14 markets, Facebook’s results are in: Anthony notes, “59% of the people surveyed said that they were communicating using over-the-top messaging apps way more in the past two years.”

Meanwhile, considering “Messaging (Messenger + WhatsApp) Can Ad ~$10B In Revenue To Facebook,” CEO Mark Zuckerberg’s brainchild is moving full bullish steam ahead into a rapidly evolving technological playing field. “We are likely to see Messenger contributing to revenues in a meaningful way in 2018 and WhatsApp will do the same in 2019. That should serve to offset investor concerns about ad loads becoming less of a significant factor driving growth on core Facebook and the increasing spend on video content, which investors fear will pressure margins,” contends the analyst.

Victor Anthony has a very good TipRanks score with a 68% success rate and a high ranking of #132 out of 4,669 analysts. Anthony garners 14.4% in his yearly returns. When recommending FB, Anthony realizes 47.8% in average profits on the stock.

This top analyst is not the only one trumpeting the bullish horn for the social media titan, with TipRanks analytics showcasing FB as a Strong Buy. Out of 35 analysts polled by TipRanks in the last 3 months, 31 are bullish on Facebook stock, 2 remain sidelined, and 2 are bearish on the stock. With a return potential of 15%, the stock’s consensus price target stands at $193.81.