Jon Hadad

About the Author Jon Hadad

Jon Hadad graduated from the University of Delaware with a degree in political science. Prior to joining the Smarter Analyst team, he was an industry analyst at a New York research firm.

All Eyes on Facebook’s (FB) Cryptocurrency Launch, Top Analyst Maintains ‘Buy’ on the Stock

With Facebook (FB) expecting to launch its cryptocurrency today, what can you expect?

For starters, the company hopes to create a global currency that its users across the world will be able to use for commerce; whether it’s sending money to each other through Messenger or purchasing goods from retailers on Facebook. For Mark Zuckerberg, this was a long time coming — the CEO discussed cryptocurrency in his mission statement last year and launched a blockchain research unit. While many expect crypto to create a new revenue stream for Facebook, few are surprised by the announcement.

SunTrust’s top analyst Youssef Squali is excited about the impending crypto announcement as he reiterates a Buy rating on Facebook stock, with $215 price target.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Yousseff Squali has a yearly average return of 25.2% and a 71% success rate. Squali is ranked #33 out of 5,202 analysts.

The analyst believes “this is a major initiative for Facebook, and one that has the potential of putting the company front and center in areas beyond advertising, including commerce and financial services, materially expanding its TAM and growth prospects.”

For one, Squali says this move puts the company in a position to be “one of the key actors at the center of the crypto currency development, and a main architect of the future of this emerging and important trend.” Though the crypto bubble burst last year, many still view crypto as the future; the analyst believes, Facebook “could bring the combination of user scale, brand support and balance sheet.”

Not only does it make Facebook the largest name in a rapidly emerging trend, but Squali says its Messenger and WhatsApp platforms “are the partners everybody wants to have to drive mass adoption.” The analyst believes this is a strong indicator that “Facebook’s intent [is] to become a transactional platform (through Messenger and WhatsApp).” As Facebook relies on advertising for nearly all of its revenue, this second stream is expected to be a major addition.

All in all, Facebook continues to be one of Wall Street’s favorite stocks, and a new revenue stream is only expected to make investors happier. TipRanks analysis of 37 analysts shows a consensus Strong Buy, with 34 of analysts rating the company a Buy and three Holding. There is an average price target of $222.03 on the stock, representing a 17% upside from current levels. (See FB’s price targets and analyst ratings on TipRanks)


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