On November 8, a hearing was held by the European Parliament’s Internal Market and Consumer Protection Committee in which whistleblower Frances Haugen testified against the growing power of the Big Tech companies, especially Meta Platforms (previously Facebook) (FB).
To put things to context, Haugen is a former employee of Meta, who revealed to Wall Street Journal in early September that Meta was quite aware of the spread of misinformation, hate, and other unethical activities that take place on its platforms, but does not stop them, to suit its own interests.
Interestingly, the recent rebranding of Facebook to Meta was also a matter of displeasure that was brought up at the European Parliament hearing, portraying it as a lack of responsibility from Meta’s end to focus more on growth rather than addressing the company’s innate issues.
Notably, the hearing was treated as urgent because it would help the European Parliament strengthen the Digital Services Act (an act to protect the fundamental rights of users of digital services) that is awaiting an official date for vote. (See Analysts’ Top Stocks on TipRanks)
Website Traffic Shows a DeclineThese past few weeks have clearly been tough on Meta, and that has reflected in the drop in traffic to its platforms. How do we know this?
TipRanks’ new Website Traffic tool, which sources its data from Semrush (SEMR), can help traders see the website traffic volume and trends for their companies of interest.
As we dove into the data, we saw that so far into Q4, there has been a sharp drop in consolidated virtual visits to Meta’s platforms, which include Facebook.com, WhatsApp, Instagram, novi.com, and business.facebook.com. Total visits from unique users to the platforms from all devices have sharply declined sequentially by 65.9%. Moreover, the share price is also on a downward slope so far into Q4, having declined 2.9%.
However, if we look at the quarter-to-date period of last year and compare it with the quarter-to-date period of this year, we see a 13.9% increase in unique visitors to Meta’s websites. Moreover, unique visitors on a year-to-date basis have risen 13.8% from last year’s corresponding period.
Experts OpineThese issues, however, do not seem to affect Monness Crespi Hardt analyst Brian White, who reiterated a Buy rating on the stock, with a price target of $460, following the hearing. “In our view, the concept of a metaverse is intriguing; however, we believe only those companies that have earned society’s trust will prove successful in this new virtual world,” said White.
Turning to Wall Street, the analyst consensus is also optimistic about Meta, with a Strong Buy rating based on 29 Buys, six Holds, and one Sell. The average Meta price target of $405.59 indicates an upside potential of 22.4%.
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Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
With the growth of the creator economy, Meta Platforms, Inc. (FB) is taking strategic steps to better monetize its userbase while supporting small businesses, making the most of favorable macroeconomic trends.
On October 11, the company announced its decision to host daily live shopping experiences on Facebook and Instagram. Live Shopping Events will be the next big step in the company's efforts to penetrate the fast-growing E-commerce industry.
I am bullish on the prospects of Meta Platforms, as I believe the company’s focus on the Metaverse and the booming online shopping industry will fuel earnings growth going forward. (See Analysts’ Top Stocks on TipRanks)
Facebook Is Positioning Itself as a Top Choice for Small BusinessesFacebook is launching E-commerce-focused events, including live shopping and BuyBlack initiatives to encourage the use of Facebook and Instagram shops.
The company first launched live shopping in May to provide real-time engagement between buyers and sellers, which is likely to result in increased spending. TikTok tested this strategy successfully with the launch of live shopping in collaboration with Walmart, Inc. (WMT) in December 2020.
Live shopping events kicked off November 1 on both Facebook and Instagram. It included brands like Benefit Cosmetics, Cocokind, Macy’s, Paintbox Nails, Tanya Taylor, Ulta Beauty, Vuori, and Walmart that educated shoppers and provided exclusive deals.
In addition, Facebook is offering a discount program that includes gifts and free shipping for buyers who purchase directly through its apps. The company intends to provide additional support to Black-owned businesses with the launch of the BuyBlackFriday show.
The BuyBlackFriday show commenced on November 5 and will run every Friday in November. Live Shopping segments from Black-owned businesses such as Shaquanda's Hot Pepper Sauce, House of Takura, and Obia Naturals will be featured on the show. Users can check out the BuyBlack collection, which will be available weekly.
According to a Facebook survey, women-owned businesses and under-represented communities were severely affected by the pandemic. The company continues to launch additional programs, tools, and resources to assist small businesses, including the launch of a program called Boost with Facebook: The Good Ideas Season.
The company is focused on providing small companies with free resources and training to help them succeed during the holiday season. Facebook is also opening Good Ideas Shops in local areas across the U.S. as part of the Good Ideas Season.
Additionally, Facebook is enhancing its Marketplace with new tools to ensure the safety of both buyers and sellers, such as improved processes for scheduling meetups. The additional tools also include a new saved search option that will notify users when new listings that match their search criteria become available.
Facebook has more than 200 million businesses using the platform every month to create virtual storefronts and connect with customers. The new initiatives introduced by the company are aimed at helping businesses efficiently launch their products and services. It also helps them with community building and tailored programs to guide business owners on how to grow and survive in a competitive market.
These initiatives are likely to attract many new businesses to Facebook's platform in the coming years. In addition, they will help the company report stellar earnings growth as businesses are likely to spend aggressively on marketing their products and services.
Macroeconomic TailwindsThe Global Social Commerce Industry was valued at $475 billion in 2020 and is expected to grow at a stellar compound annual growth rate of 28.4% through 2028 to become a multi-trillion-dollar industry.
The increasing time spent on social media, coupled with the expansive tools introduced by social media companies to connect buyers with sellers and to process payments, is expected to drive this industry forward. The use of the latest technologies such as artificial intelligence, machine learning, and virtual reality will also play a key role in the growth of this industry.
Facebook, as the world’s leading social media platform with over 2.9 billion monthly active users, is well-positioned to benefit from this favorable industry outlook.
Wall Street’s TakeTurning to Wall Street, Meta Platforms has a Strong Buy consensus rating, based on 29 Buys, six Holds, and one Sell assigned in the past three months. Based on 36 Wall Street analysts offering 12-month price targets for Meta Platforms stock, the average price target comes to $405.59, which implies an upside of 22.3% from the current market price.
The recent decline in stock price has widened the margin of safety for those looking to invest in Meta Platforms.
TakeawayFacebook's Marketplace is evolving, and the holiday season appears to be an opportune time for the company to launch and test its latest tools, which is exactly what the company is doing. Despite the regulatory risks faced by the company, Meta Platforms is likely to reward long-term shareholders handsomely.
Disclosure: At the time of publication, Dilantha De Silva had an ownership stake in Meta Platforms.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
References
https://about.fb.com/news/2021/10/shop-on-facebook-instagram-holiday-season/ https://about.fb.com/news/2021/09/state-of-small-business-recovery/ https://about.fb.com/news/2021/05/introducing-your-new-favorite-way-to-shop-live-shopping-fridays/https://www.grandviewresearch.com/industry-analysis/social-commerce-market
https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/