Meta Platforms’ (NASDAQ:META) new Threads app has exceeded 100 million users, becoming the fastest-ever app to hit this mark. OpenAI’s ChatGPT needed about 2 months to attract 100 million users, while Threads got there in 5 days.
The Threads launch has been “way beyond our expectations,” CEO Mark Zuckerberg said on Friday.
While several Wall Street analysts downplayed the Threads impact on Meta’s financials in the near term given the company’s focus on ramp and not on monetization, an Evercore ISI analyst argues that the new app “poses very little downside for Meta’s current business but creates Revenue & Profit upside optionality for the company.”
“Over the next couple of years, we estimate Threads could potentially reach close to 200MM DAUs (10% penetration or close to the 240MM DAUs Twitter had at the time of its acquisition) and generate $8B in annual revenue, or 5% upside to our current ’25 Revenue estimate for META. Assuming 50% incremental margins, we estimate that $8B in Threads revenue would generate almost $1.50 in incremental EPS or 6-7% accretion to META’s ‘25E EPS,” the analyst said in a client note.
The analyst reiterated an Outperform rating on Meta Platforms’ stock, as well as the Top Pick designation. His price target on the social media giant’s stock sits at $350 per share.
