Facebook (FB): Some FANGs Are Sharper Than Others - Wedbush
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Wedbush analyst, Michael Pachter, reiterated his Outperform rating on shares of Facebook (NASDAQ: FB) noting that the company's unique user engagement offers a runway for greater monetization. Continued investments in delivering advertising for its Instagram, WhatsApp, and Messenger platforms are likely to yield significant returns in future years, which should drive contribution margins even higher. Facebook’s Oculus Rift VR platform has significant potential to change the way its users communicate, and we think that applications for education, gaming, and services are likely in the future. No change to the price target of $162.
Amazon (NASDAQ: AMZN) is the other winner due to its position at the top and bottom ends of the purchase funnel, with AWS and video optionality. The analyst expects AWS Marketplace and its Amazon Workspaces WAM to begin to generate significant software and SaaS sales going forward, at very high margin. No change to the price target of $900.
Then on the losing side of the market there is Netflix (NASDAQ: NFLX) where content spending and compelling alternatives contribute to downside risk ahead. On September 28 the analyst hosted a conference call with two former content acquisition executives that reinforced the view that content costs will inexorably rise, while the quality may suffer due to the sheer number of online and cable competitors for original content.
Shares of Facebook closed at $128.77 yesterday.
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