She admired Mark Zuckerberg’s commitment to a vision despite overwhelming odds.
The analyst highlighted Meta’s sharp contrast to Apple Inc’sAAPL events. Mark Zuckerberg was on screen 90% of the time, making it clear that he is the project manager & CTO for the metaverse. Also, whereas AAPL highlights specific apps on its iOS platform, Meta shared its stage with the CEOs of both Accenture PlcACN and Microsoft CorpMSFT – big guns for a big vision. Meta also announced metaverse partnerships with Comcast CorpCMCSA NBC, Marvel, Zoom Video Communications, Inc.ZM, Ray-Ban, and several other large companies.
Near-term, the analyst worried that consensus estimates were too high, based on Meta’s promises of higher investments in the metaverse. At the same time, it purposely slowed its revenue growth to better compete with TikTok.
She believed financial discipline is secondary to Meta’s long-term vision.
The analyst recommended that investors remain on the sidelines while they assess several structural valuation risks, including consumer behavior shifts, competition, moat degradation, regulatory risks, and metaverse investment risks.
JMP analyst Andrew Boone reiterated Market Outperform on Meta and the $215 price target.
He acknowledged it as highly early to the metaverse and its use case limitations today. He believed augmented reality (AR) can unlock new social, work, and game experiences as he came away from Meta Connect, feeling the company is driving AR up the S-curve as it improves the hardware, developer tools, and experiences.
