Investing.com Coverage Initiation by Cantor Fitzgerald

Cantor Fitzgerald initiated coverage of 22 global internet stocks on Wednesday, highlighting Meta Platforms (NASDAQ: META), MercadoLibre (NASDAQ: MELI), and DoorDash (NASDAQ: DASH) as top picks.

Key Insights

The firm sees considerable growth opportunities in these companies due to:
– Advances in AI
– Share gains from offline channels
– Improving unit economics

However, they caution about macroeconomic risks that could result in volatility for medium-term free cash flow growth.

Meta Platforms (META)

Cantor assigned an Overweight rating and a $660 price target, indicating a 27% upside. The analysts express confidence in Meta’s ability to exploit opportunities with potential for healthy top-line growth exceeding a mid-teens compound annual growth rate (CAGR) over the next two to three years.

Despite skepticism surrounding AI’s ROI, Cantor suggests that Meta’s current valuation factors in AI worries and some recession likelihood. They anticipate potential upward revisions in earnings estimates.

MercadoLibre (MELI)

MercadoLibre received an Overweight rating and a $2,530 price target. Cantor is optimistic about MELI’s growth in both fintech and eCommerce sectors, projecting its gross merchandise volume and total payment volume to rise by +17% and +20% CAGR, respectively.

They expect annual margin expansion of 140bps+ from FY24E to FY26E, believing there is room for positive valuation adjustments.

DoorDash (DASH)

Cantor issued an Overweight rating with a $160 price target for DoorDash, implying a 24% upside.

They foresee sustained growth in gross order value driven by increased user growth, frequency gains, and new products, complemented by expanding EBITDA margins.

Despite economic slowdown concerns, Cantor points to DoorDash’s strong customer engagement as a buffer against recessionary challenges.