Social media companies and analysts speculate on the year ahead, Zoom acquires assets from Liminal, and other notable stories from this week.
Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.
PICK OF THE LITTER: As 2021 comes to a close, firms have started to speculate on the best stocks in the space for 2022. With interest rates rising and global economies “hopefully opening” in 2022, Evercore ISI analyst Mark Mahaney said he is taking a “more muted/cautious stance” on the internet space, which he calls a “relatively high-growth, high-multiple” sector going into 2022. Within the mega caps, Mahaney’s top picks, in order, are Amazon.com (AMZN), Uber Technologies (UBER) and Meta (FB, MVRS). The analyst says Amazon is “arguably the single best fundamental asset in Net-land.” Baird analyst Colin Sebastian told investors that internet investors remain largely focused on shorter-term trends, near-term growth comps and macro influences, rather than secular growth drivers, heading into 2022,. The analyst assumes that near-term sentiment will be driven more by forward-year growth comps and margin trends, and less by the size of total addressable markets or secular growth themes. With this in mind, he’s transitioned his large-cap pick from Alphabet (GOOG, OOGL) to Amazon.com and Meta. For Meta, Sebastian expects more positive commentary related to core advertising trends in 2022. On Amazon, he says the company is a key beneficiary of digital transformation and a mix shift towards recurring revenues. For Zynga, Sebastian sees potential positive catalysts from easing Identifier for Advertisers headwinds and ramping monetization of new titles.
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