Threads, a new social media app, has more than 100 million users, making it the fastest-growing app to date. In comparison, it took OpenAI’s ChatGPT about 2 months to reach 100 million users, and Threads only 5 days.
On Friday, Meta CEO Mark Zuckerberg said the launch of Threads “far exceeded our expectations.”
While several Wall Street analysts believe Threads will have limited impact on Meta’s financials in the short term, as the company is currently focused on growth rather than profitability, an Evercore ISI analyst sees the new app as having “little to no impact on Meta’s current business.” Negative impact, but creates opportunities for revenue and profit growth for the company.”
“Over the next few years, we estimate that Threads could reach close to 200 million daily active users (90% of Twitter’s 240 million daily active users at the time of the acquisition) and generate $8 billion in annual revenue, equivalent to our 5% growth in Meta’s 2025 revenue forecast. Assuming a 50% gross margin, we estimate that the $8 billion in revenue generated by Threads will generate nearly $1.50 in additional EPS, equivalent to Meta’s projected 2025 EPS 6% to 7% growth,” the analyst said in a client note.
The analyst reiterated his “outperform” rating on Meta Platforms stock and identified it as a top pick. He has a $350 price target on the social media giant’s stock.
