Facebook Inc Could Blast Higher by Another 25%, Says Daniel Ives

GBH Insight's Daniel Ives now eyes 25% upside potential for the social media titan, even as shares dip 4% today.


Facebook Inc (NASDAQ:FB) shares are taking a 4% slip this morning after CEO Mark Zuckerberg announced the social media titan’s next game-changer: posts regarding friends and family will take center stage over news and branded content. The meaning? The move will hit user engagement in the near term.

Yet, GBH Insights analyst Daniel Ives remains entirely unfazed, more upbeat than ever on the company’s monetization prospects “for 2018 and beyond.”

Between these “strong monetization tailwinds” and the company’s “consumer mousetrap” expansion as the new priority for 2018, the analyst likes what he sees, reiterating a Highly Attractive rating on FB stock. Not only is Ives remaining bullish, he dials up the price target from $210 to $225, which implies a 25% upside from current levels. (To watch Ives’ track record, click here)

Overall, “With this platform on pace to be over 1 billion MAUs by mid 2018 based on our estimates, we view this an underappreciated asset by the Street that could be a major growth catalyst for Facebook over the next 12 to 18 months on the advertising front. While the News Feed changes just announced could be worrisome in terms of an ad growth hiccup, we believe this overhaul was the right move for longer term user engagement and driving ‘meaningful content’, which remains the core ingredient in Facebook’s recipe for success for the coming years,” Ives argues, satisfied by the company’s robust execution and encouraging metrics that have FB looking at “modest upside” for its fourth quarter showcase. Additionally, the 2018 outlook seems “good enough” from where Ives surveys the giant, whose heavyweight worldwide installed base keeps getting bigger; “especially on the Instagram side of the house,” the center of Ives’ bullish case.

TipRanks underscores big confidence from Wall Street on this social media darling, with 29 out of 30 analysts bullish on Facebook stock and just 1 running bearish for the hills. With a solid return potential of 15%, the stock’s consensus target price stands at $216.68.