Meta stock surged 194% last year, but Wall Street may still be underestimating the Facebook parent company, Mizuho analysts said Wednesday. The firm hiked its target price for shares of Meta (META) from 400 to 470, saying the social media giant can top revenue expectations this year.

“We believe that fiscal year 2024 consensus revenue growth of 13% appears conservative, considering tailwinds from product improvements, increased engagement (AI content distribution), and rising demand of Chinese advertisers,” wrote Mizuho analyst James Lee.

Mizuho’s 470 price target implies 31% upside from Meta’s closing price Tuesday. The target is among the most bullish estimates for the company on Wall Street, according to FactSet data.

On the stock market today, Meta stock rose nearly 3% to 367.2 in morning trades.

Year (Two) Of Efficiency?

Mizuho estimates Meta’s fiscal year revenue will grow about 15% year over year in 2024 to $153.5 billion.

Further, Mizuho expects the company will lower its guidance on operating expenses throughout the year. That would be consistent with historical trends, Lee wrote.

Meta previously estimated its 2024 operating expenses will fall between $94 and $99 billion. That’s compared to estimated expenses between of $88 billion in 2023. Meta’s surge last year was partly fueled by layoffs and cost-cutting as part of what Chief Executive Mark Zuckerberg branded as a “Year of Efficiency.”

A third potential catalyst for Meta, Mizuho believes, is the use of WhatsApp and artificial intelligence to automate customer service. Zuckerberg said on an analyst call in October that business messaging could be “the next major pillar” for Meta.

“Based on our estimate, we believe that WhatsApp represents the largest potential given its large base of users of (more than) 2 billion and the room for monetization improvements compared to the overall Meta platform,” Lee wrote.

Meta Stock: Extended Past Buy Point

Meanwhile, Meta stock’s gains have extended shares beyond a previous 326.20 buy point, according to IBD MarketSmith.

Meta shares have gained about 4% since the start of the year.

Further, Meta stock is on the IBD Leaderboard and the Tech Leaders list.

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