Analyst: Threads will generate $8 billion in revenue for Meta in 2025

According to analysts at Evercore ISI, a well-known investment bank, Threads, a new social media app owned by Meta, is expected to generate $8 billion in revenue by 2025.

Threads, a new social media app, has more than 100 million users, making it the fastest-growing app to date. By comparison, OpenAI's ChatGPT took about two months to attract 100 million users, while Threads took only five days.

On Friday, Mark Zuckerberg, chief executive of Meta, said the launch of Threads "far exceeded our expectations".

Although several Wall Street analysts believe that Threads has a limited impact on Meta's financial position in the short term, because Meta is currently focused on growth rather than profit, an analyst at Evercore ISI believes that the new app "has little negative impact on Meta's current business, but creates revenue and profit growth opportunities for the company."

"over the next few years, we estimate that Threads could reach nearly 200m daily active users (equivalent to 90 per cent of the 240m daily active users of Twitter at the time of the acquisition) and generate annual revenue of $8 billion, equivalent to the 5 per cent growth we expect for Meta in 2025. Assuming a marginal gross margin of 50 per cent, we estimate that Threads's revenue of $8 billion will generate additional earnings per share of nearly $1.50 per share, equivalent to 6 to 7 per cent of Meta's projected earnings per share in 2025. " The analyst said in a client report.

The analyst reiterated his "outperform" rating on Meta platform stocks and identified them as the preferred stock. He has a target price of $350 a share for the social media giant.