Market Overview

Facebook's Oculus: It's Getting Real

Facebook's Oculus: It's Getting Real
Related FB
Q3 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolio
Moderate Inflation, Positive Retail Earnings Offer Lift In Back-And-Forth Market
Why Twitter's Robust Revenue Growth Could Slow (Seeking Alpha)

After attending the Oculus Connect 4 conference, Bank of America Merrill Lynch analyst Justin Post has maintained a Buy on Facebook Inc (NASDAQ: FB) and a $190 price objective. 

The biggest news was the announcement of the Oculus Go, a $199 standalone virtual reality device that's expected in early 2018, Post said in a Thursday note. (See Post's track record here.) 

Oculus for Business; a price cut on the Rift Bundle; and enhancements to Oculus and Facebook VR environments were among the announcements at the conference in San Jose, according to BofA. 

Facebook can be a leader in the VR business, as it is focused on lower entry prices and growing content, Post said. While Oculus isn't expected to make a material financial contribution to Facebook in the next 12 to 18 months, Post said he's impressed with Oculus Go. The device eliminates the wire that's present with premium VR offerings and the mobile phone of mid-range solutions.

The VR experience with the Go is below that of premium counterparts, Post said. It has limited motion capture capabilities, and the battery life of the device is still unkown. 

The $190 price objective is based on 29x GAAP EPS, mostly in line with the social and online media sector. Risks for the price objective include high valuation that discounts growth; changes in user engagement; privacy issues; risks to executing Messenger & WhatsApp monetization; a negative impact on margins because of higher investment; and a negative macroeconomic impact on advertising prices.

Related Links: 

Facebook's Oculus Setting Sight On Cheaper Headgear Launch In 2018
SHIFT Tech Summit In Detroit Looks At What's Next In Virtual Reality

Photo courtesy of Oculus. 

Latest Ratings for FB

Nov 2018ArgusMaintainsBuyBuy
Oct 2018Morgan StanleyMaintainsOverweightOverweight
Oct 2018Raymond JamesMaintainsOutperformOutperform

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Bank of America Merrill Lynch Justin Post Ryan GoodmanAnalyst Color Price Target Analyst Ratings Tech Best of Benzinga


Related Articles (FB)

View Comments and Join the Discussion!

Latest Ratings

CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Video: The Impact Of Satellite Imagery And Predicting The Next Move In Financial Markets

Twitter Unlocks Rose McGowan's Account, Tries To Explain Itself