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Cantor Fitzgerald raised its price target on Meta Platforms Inc. (NASDAQ:META) to $807.00 from $676.00 on Wednesday, while maintaining an Overweight rating on the stock. The social media giant, currently valued at $1.75 trillion with its stock trading near its 52-week high of $740.91, has demonstrated robust financial health according to InvestingPro data, with impressive gross profit margins of 81.77% and strong revenue growth of 19.37% over the last twelve months.
The price target increase follows Meta’s announcement of the rollout of advertising in WhatsApp, which will include Promoted channels and Status ads. Meta has positioned these ads away from WhatsApp’s chat interface to minimize disruption to the core messaging experience.
WhatsApp currently boasts over 3 billion monthly active users globally, including 100 million in the US, according to Meta’s first-quarter earnings call. Trial documents from the FTC vs. Meta case revealed WhatsApp has an 82% monthly-to-daily active user ratio, with each daily user viewing approximately 50 stories per day. This extensive user base has contributed to Meta’s strong market position, with InvestingPro analysis showing the company maintains 13 key financial health indicators, including strong cash flow coverage and solid balance sheet metrics.
Meta also disclosed that 1.5 billion users access the Updates tab daily, highlighting significant engagement within the platform. This engagement metric suggests substantial potential for the new advertising formats.
Cantor Fitzgerald estimates that if WhatsApp reaches an ad load of 5%, which would be approximately one-quarter of Instagram and Facebook’s current ad load, the new advertising features could contribute mid-single-digit growth to Meta’s earnings before interest and taxes and earnings per share by fiscal year 2027. With analyst consensus remaining strongly bullish and targets ranging from $466 to $935, investors seeking deeper insights into Meta’s valuation and growth potential can access comprehensive analysis through InvestingPro’s detailed research reports, which provide expert analysis on the company’s financial health and future prospects.
In other recent news, Meta Platforms has announced plans to introduce advertising on WhatsApp, marking a significant shift for the messaging platform that has largely remained ad-free since its 2014 acquisition. Ads will be added to the Updates tab, which is used by 1.5 billion people daily, potentially opening a substantial new revenue stream. Wells Fargo (NYSE:WFC) maintained its Overweight rating on Meta, with a price target of $664, citing a potential $6 billion incremental revenue opportunity from WhatsApp ads. The firm sees this as a vital part of Meta’s future growth strategy, expecting ad revenue on WhatsApp to mirror Instagram’s metrics eventually.
Meta also announced a major update for Facebook, merging videos and reels into a single format. This change aims to simplify video creation and posting, allowing users to access more creative tools and maintain control over audience settings. Additionally, Meta introduced features on Threads to help users view content from the fediverse, a network of interconnected social media servers. These features include a dedicated feed for federated posts and a search option for fediverse profiles.
In recruitment news, Meta reportedly offered up to $100 million in signing bonuses to lure talent from OpenAI, highlighting the intense competition for AI expertise among tech giants. Despite these offers, OpenAI CEO Sam Altman stated that none of their top talent has accepted the offers, underscoring the competitive landscape in AI development.
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