It is hard to imagine how society would react to the viral outbreak had it taken place, say, 30 years ago. Whatever your opinion about the effects of social media, or, in particular, the problematic aspects brought to light recently about industry leader Facebook (FB), it is hard to argue with the sense of community these platforms are providing in times such as these.
At least that is the opinion of Tigress Financial’s Ivan Feinseth. The 5-star analyst reiterated a Strong Buy rating on Facebook shares, without suggesting a price target. (To watch Feinseth’s track record, click here)
Feinseth’s endorsement is hardly surprising as Facebook’s recent pullback has presented investors with an opportunity not available until coronavirus played havoc with the market. To note, even after the recent rally, Facebook is still down by 19% year-to-date.
Along with a balance sheet and cash flow the envy of most companies, Facebook has endless growth drivers and keeps adding engagement increasing initiatives. Is there a pie Facebook doesn’t currently have a finger in? Apart from the obvious names under its umbrella, such as Instagram, WhatsApp, and Oculus, you can add Facebook Dating, Facebook News, and the acquisition of AI vision focused Scape Technologies to the list. Add the recent launch of a new product development team, New Product Experimentation (NPE), which is focused on increasing the way users and advertisers engage with the platform, alongside a further addition; Facebook recently acquired the creator of the popular VR game Beat Saber, production studio Beat Games. The company will operate under Oculus, expanding its VR offerings. And what about Facebook Pay? And the purchase of cloud video gaming company PlayGiga? Enough for you?
It is for Feinseth, who said, “FB is benefiting from increasing user engagement as more people shelter in place. The COVID-19-driven global quarantine is making FB the number-one place for everybody to connect for social, entertainment, business, and information needs… We believe significant upside exists from current levels and continue to recommend purchase. FB‘s strong balance sheet and cash flow will enable it to overcome any near-term COVID-19 related business down cycle.”
Feinseth’s prognosis gets almost total backing from the Street. 1 Hold and Sell each are the feeble counterpunch to 37 Buy ratings, therefore, bestowing on the social media leader a Strong Buy consensus rating. with an average price target of $235.88, the analysts forecast an additional 41% will be gained by FB stock over the next year. (See Facebook stock analysis on TipRanks)
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