Facebook, Inc. (NASDAQ:FB) is wading through a trying era following the Cambridge Analytica blunder- which once was though to have hit 50 million users.
Well, that user data leak now looks even worse- apparently roughly 87 million users are now thought to have been hit by the privacy and data breach, as per CEO Mark Zuckerberg’s conference call for media held yesterday afternoon.
GBH Insights analyst Daniel Ives is all too aware that this is “a significantly higher figure that adds to the heat Zuckerberg & Co. will face next week appearing in Congressional testimony and hearings around the Cambridge leak.”
That said, “despite this white knuckle period ahead for Facebook which could result in a range-bound stock in the near-term,” the analyst reiterates a Highly Attractive rating on FB stock with a $240 price target. Notably, this suggests a confident 51% upside from current levels. (To watch Ives’ track record, click here)
“While there have been further security enhancements to the platform added/changed over the past few weeks as this intense investigation continues post Cambridge, this could be a ‘multi-year’ process to fully grasp the complexity of issues and algorithms around this data leak and guarding against future issues going forward. Facebook will have roughly 20,000 employees working on security of the platform by year-end as this remains a major area of investment for Facebook to protect user data and make sure the platform recovers,” writes Ives.
Street apprehension didn’t need more “gasoline to the fire” when it comes to the “nightmare PR minefield” that is the Cambridge data disaster. However, Ives continues to be bullish as FB climbs out of “this hurricane-like storm,” betting that the titan’s business model will stand through the fray.
FB stock continues to reign as a Wall Street favorite, according to TipRanks analytics. Out of 33 analysts polled in the last 3 months, 30 are bullish on the social media titan, 2 remain sidelined, while 1 is bearish on the stock. With a solid return potential of nearly 43%, the stock’s consensus target price stands at $221.38.