Needham Considers It Futile For Meta To Compete With TikTok, YouTube, Amazon, Google

  • Needham's Laura Martin said Meta Platforms Inc's META falling brand value is a lead indicator for rising customer acquisition costs, churn levels, and declining pricing power. 
  • The falling consumer brand value made her incrementally more cautious about META.
  • Kantar's 2022 Global Brand study concluded that the value of the Facebook brand fell from 6th in 2021 to 8th in 2022, and its total brand value fell 18% y/y, marking the most considerable y/y value destruction for any brand among the Top 10.
  • Also Read: TikTok President Reasons Why Copying The Former Will Not Be Conducive For Facebook
  • Martin was pessimistic about META's efforts to catch up with TikTok and, Alphabet Inc GOOG GOOGL YouTube in the video; and Inc AMZN & Google in eCommerce.
  • She was also concerned over META's enormous spending to create metaverse reflecting its existential risks to its historical collection of businesses.
  • Martin saw that META's vision of the future would not play out eight years from now, forcing it to write off the enormous investments in 2022 and 2023.
  • Martin has a Hold rating on Meta with a price target of $160.87.
  • Price Action: META shares traded higher by 1.51% at $163.30 on the last check Friday.
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