Not for the first time, news boards have recently been plastered with negative Facebook (FB) headlines. Whistleblower Frances Haugen has shone a spotlight on the social media giant’s alleged warped priorities, where profits are deemed more important than users’ health.
It’s a bad look and has been one of the factors behind the stock’s 15% drop from the all-time highs notched in early September.
But according to Tigress analyst Ivan Feinseth, the sell-off has created a “long-term buying opportunity." In fact, Feinseth not only reiterated a Buy rating for FB shares but also increased the price target – from $430 to $466. Investors could be sitting on gains of 43%, should Feinseth’s forecast play out over the coming months. (To watch Feinseth’s track record, click here)
As it has done many times before, Facebook will “overcome” the controversy and “continue to create long-term shareholder value,” according to Feinseth. And it has numerous ways to do so.
For one, the ongoing shift from traditional advertising to the digital realm, along with the increasing number of small and midsize businesses that use the platform for advertising purposes, positions the company to be a major beneficiary of the “massive growth” in digital advertising. “FB’s ever-growing user base and ongoing enhancements provide an attractive marketplace for advertisers to use FB’s proprietary tools to target their best potential customers more effectively,” the 5-star analyst explained.
But the changes in advertising habits are just one growth driver. The “ongoing potential” to monetize the company’s multiple applications and technologies, including Instagram, Messenger and WhatsApp, will drive “significant upside.”
And Facebook has its eye on the future, “investing in building its social media computing platform.” These include augmented reality (AR) and virtual reality (VR) offerings, areas which Feinseth believes will affect “how we interact with computers and each other.”
There’s also the new virtual meta-verse concept to look out for. Still in the early stages of development but it is an idea offering Zuckerberg’s vision for “both the future of FB and the Internet.”
Is that not something to be scared of rather than excited about? Not according to Feinseth, who believes it will create a place where “users potentially live, work and play inside the FB digital world platform, further driving interaction, communication, and the growing concept of social commerce.”
It’s clear that Wall Street generally agrees with Feinseth's take on Facebook. There are currently 33 analyst reviews on record, of which 1 recommends to Sell, 5 say Hold and the remaining 27 say Buy, all culminating in a Strong Buy consensus rating. With an average analyst price target of $422.88, analysts are projecting upside potential of 30% from the current share price. (See Facebook stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.