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FB Stock - Analyst Says This Will Send Facebook Inc Skyrocketing

FB Stock - Analyst Says This Will Send Facebook Inc Skyrocketing
FB Stock - Analyst Says This Will Send Facebook Inc Skyrocketing

Analyst: Huge Upside for Facebook Inc
Facebook Inc (NASDAQ:FB) stock is up nearly seven percent for the year. That doesn’t sound like much, but it’s pretty decent considering that the market dragged down most tech stocks earlier this year, putting them into negative territory. FB stock was no exception. However, now that fear in the market has mostly subsided, FB stock could continue its growth path. According to one analyst, Facebook’s growth has the potential to send FB stock soaring.
On April 11, Pivotal Research analyst Brian Wieser reiterated his “Buy” rating on shares of Facebook and raised his price target from $136.00 to $154.00. (Source: “Facebook’s stock given 40% upside potential ahead of earnings,” MarketWatch, April 11, 2016.) That implies a 40% upside in FB stock from Monday’s closing price.

“Facebook continues to grow with propulsion from several engines of growth,” said Wieser. (Source: Ibid.)
So what will get FB stock to Wieser’s price target? Let’s take a look.
Advertising
In his note, Wieser compared Facebook to Alphabet Inc (NASDAQ:GOOG), though he prefers the social media giant.
“We continue to view Facebook much more positively than Alphabet overall,” Wieser said. “Although Facebook and Alphabet’s Google are co-dominant players in global digital advertising, Facebook’s focus on their core business and its future evolution separates the company from its larger peer’s parent.” (Source: Ibid.)
Advertising, for the moment, is Facebook’s bread and butter. Ad revenue accounts for 96.5% of the company’s total sales with “payments and other fees” comprising the rest. (Source: “Facebook Reports Fourth Quarter and Full Year 2015 Results,” Facebook Inc, January 27, 2016.)
Facebook’s ad revenue is also still seeing explosive growth. In the latest quarter, ad revenue increased 57% over the previous year. (Source: Ibid.) To see how impressive that growth rate is, take a look at Google. Google’s ad revenue increased “only” 17% in the company’s latest quarter over the previous year. (Source: “Alphabet Announces Fourth Quarter and Fiscal Year 2015 Results,” Alphabet Inc, February 1, 2016.) So from an ad growth perspective, Facebook is well ahead of Google.
And it’s no wonder. Facebook’s massive userbase is an advertiser’s dream, and it’s still rapidly growing. The social service platform now boasts 1.59 billion monthly active users (MAUs) as of December 2015, up 14% over the previous year. (Source: Ibid.) 
FB Stock - Analyst Says This Will Send Facebook Inc Skyrocketing


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