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Analyst: Facebook's Teen Problem Will Extend To Later In Life, Too (FB)

FB – Piper Jaffray doesn’t see U.S. teenagers that have ignored Facebook returning to the platform when they get older.

Facebook Inc (NASDAQ:FB) is far from the most popular social networking platform for U.S. teenagers.

That honor belongs to Snapchat, which a whopping 82% of United States teens use, according to a recent survey by Piper Jaffray. Meanwhile, less than half of American teenagers use Facebook.

And that problem isn’t likely to go away as those users get older, the firm intimated to Yahoo! Finance:

“It’s not clear to us that teens growing up today feel the need to have an eventual organized network,” Piper Jaffray analyst Sam Kemp told Yahoo Finance.

“Facebook is not becoming obsolete by any means, but the lack of adoption early on in the life cycle suggests that there’s just a declining utility of the network. That’s going to prevent user growth beginning in 2019,” he added.

Piper Jaffray says the reason why teens prefer platforms like Snapchat and Instagram over Facebook is pure simplicity. These days, young people prefer to communicate via photos and videos, not text. Snap makes it very easy to do so, and although Facebook is pushing those abilities itself, teenagers don’t need another platform, since they’re already all on Snapchat.

And a return to text-based communication is highly unlikely, says the firm.

Facebook Inc shares closed at $174.98 on Friday, up $0.42 (+0.24%). Year-to-date, FB has gained 52.09%, versus a 16.66% rise in the benchmark S&P 500 index during the same period.

FB currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 50 stocks in the Internet category.

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FB Current Price $158.78 3.43%
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The day of this event (Oct. 22, 2017)
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