With Twitter Delisted, Put Your Money Into These Stocks Instead

It’s official, Twitter is no longer available to the general public. With Elon Musk already making his mark on the microblogging social media platform, many investors are probably wondering where they should be looking if they are still looking to capitalize on the ramshackle social media space. In this piece we will look at two social media companies, META and SNAP, which seem far more compelling than Twitter. Indeed, social media reversals won’t be easy, but Elon Musk’s big bet, I believe, suggests he sees value in the space.

Without a doubt, Twitter is a beast when it comes to microblogging. He has more than his fair share of baggage. However, with visionary leader Elon Musk at the helm, anything is possible as he seeks to lift the company out of its historic funk.

Whether it’s huge layoffs to improve profitability prospects or introducing controversial product changes (pay for verification), there’s no doubt that boldness and willingness to pivot could be key to turn the tide.

With interest rates rising, it’s high time for unprofitable (or barely profitable) social media platforms to take the plunge into profit growth. While Musk’s reign will surely be turbulent, we as investors will no longer be able to witness the instability of TWTR shares in the public markets. It’s been a fun ride, but investors need to look elsewhere for exposure to the social rebound, which could be expected in 2023.

With Twitter removed from the list, here are two actions to consider.

Meta Platforms is already a profitable business reaping cash flow from its family of social media apps. Undoubtedly, Meta is an unpopular company with the general public and investors.

CEO Mark Zuckerberg is going all out in the Metaverse, with around $15 billion spent on Metaverse initiatives. In a rising rate environment, wasting such sums of money will be punished, even if such projects promise prosperous gains in the future.

Recently, Meta stock has gained ground after its catastrophic implosion of more than 75% from peak to trough. Meta lays off 11,000 workersa decision greeted with optimism on Wall Street.

As Meta continues to put the brakes on its forward-thinking ambitions while righting the ship with Facebook, I believe META stock has the wherewithal to deliver strong results for investors moving forward. If anything, Meta is still the best publicly traded social media stock. While TikTok is a formidable rival to measure against, I have no doubts about Meta’s abilities to replicate and build on the success of its video-based social media counterpart.

As 2023 approaches, analysts will be much more optimistic with the “lite” version of Meta. Even as the ads weigh in a recession year, the stock is oversold here, leaving a big advantage for brave buyers. Over the past five trading days (at the time of writing), the stock is up more than 24%.

Despite the run, Meta stock is still cheap at 10.7x the earnings of the last few months. Such a multiple doesn’t do justice to the enduring family of social media apps. Forget the metaverse; the portfolio of wonderful social media apps will help meta stock rise after its crash.

What is the target price for META stock?

Wall Street is bullish on Meta. The average META stock price target of $146.06 has come down a lot over the past year. Still, the average price target suggests gains of 29.2% from here.

Recovering from the social media wreckage will not be easy for companies that have struggled to maintain profitability. Even after its recent rebound, Snap stock remains down 86% from its all-time high. Amid Meta’s layoffs, Snap investors seem optimistic that similar job cuts could be on the cards for Evan Spiegel’s empire.

Undoubtedly, Snap has many forward-thinking projects, including augmented reality (AR) software and hardware technologies (glasses). Indeed, these products could be essential for next-level growth. However, as rates increase, it may be necessary to pull the brakes to get Snap out of the gutter.

Like TikTok, Snap’s user base is largely made up of a younger audience. As the company looks to increase engagement (and growth) while being more mindful of profitability metrics, I think the company can find a happy medium.

At the time of writing, the shares are trading at 4.1 times sales, a modest multiple to pay for a company that could turn a corner by controlling costs.

What is the price target for SNAP shares?

Wall Street is wary of Snap shares, with a “Hold” rating. The average SNAP stock price target of $10.62 suggests downside potential of 8.3% from here.

Conclusion: Wall Street sees more upside in META stocks

The social media trading scene is less crowded, with Twitter now out of public markets. Still, there’s no shortage of promises (and beats) social stocks to play a recovery. META stocks are preferred by Wall Street over Snap stocks.

Disclosure

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

About Jason Norton

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