As such, Facebook will see higher content costs associated with video and do so at a time when Netflix, Inc. NFLX and Amazon.com, Inc. AMZN are spending between them $10 billion on video content.
"To what point is [Facebook CEO] Mark Zuckerberg willing to go in order to compete for those TV audiences," the analyst asked.Meanwhile, Facebook's average revenue per user has been slowing for four consecutive quarters which demonstrates the company needs new levers like video to drive engagement and offset a decline in impressions.
But despite these concerns the case can be made for a further 25 percent upside, Cakmak acknowledged. Nevertheless, the near-term concerns are sufficient enough for the analyst to maintain a Neutral rating on the stock.
At last check, shares of Facebook were up 4.24 percent at $172.63.
Related Links: Facebook's Earnings Continues To Impress Analysts, Stifel Sees Upside To $200 Per Share 5 Biggest Price Target Changes For Thursday© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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