Facebook (NASDAQ: FB), Silicon Valley’s golden child, never ceases to impress the public with clever innovations. Most recently, the social media giant has announced an endeavor to share AMBER alerts on newsfeeds, unroll Facebook at Work, and expand Facebook’s Audience Networks. Facebook will be releasing fourth quarter results on January 28th.
On January 13th, Facebook announced a partnership with the National Center for Missing and Exploited Children in an effort to integrate AMBER alerts into users’ newsfeeds. The combined effort will share photographs and all relevant information about the missing child to users in targeted locations. Facebook hopes that its massive user base will be able to play an integral role in locating missing children, especially within the critical hours directly following abduction.
Investors are also looking forward to Facebook at Work becoming a supplement of the social media website. Facebook at Work allows businesses to create their own social networks so colleagues can communicate with one another. Employees will be able to share a professional image of themselves and use the site as a communication platform throughout the day. The site will have a different color interface to differentiate it from regular Facebook, though users will be able to sync their accounts. A beta version of the site is being tested and the final product is expected to launch later in the year, though no specific date is set.
Some people shy away from Facebook because of the way in which it broadcasts private life, but investors hope that Facebook at Work will enable user growth by encouraging new accounts from this demographic. This is important for investors after Facebook’s last quarterly report revealed slowed growth. Currently, Facebook at Work does not have ads.
Lastly, Facebook is still expanding its Audience Networks platform, also known as FAN. Launched in October of 2014, FAN employs the personalized and targeted science of Facebook advertisements but integrates them onto different mobile apps. The platform creates new means for monetization without inundating Facebook users with additional advertisements.
Analysts remain bullish on Facebook for a variety of reasons.
On January 14th, analyst Brian Wieser of Pivotal Research reiterated a Buy rating on Facebook and raised his price target from $103 to $105. Wieser noted, “Facebook remains our favorite name in the sector… Facebook can point to a wide range of factors which will sustain growth through 2015 and beyond, as increasing share of spending from small businesses and large brands alike as well as ongoing improvement in focus on performance-based marketers will all help to sustain rapid growth.”
Brian Wieser has rated Facebook 15 times since May 2012, earning a 92% success rate recommending the stock and a +41.2% average return per FB recommendation. Overall, Wieser has an 77% success rate recommending stocks with a +20.6% average return per recommendation.
Separately on January 14th, analyst Stephen Ju of Credit Suisse reiterated an Outperform rating on Facebook and raised his price target from $88 to $102 mostly based on potential revenue to be derived from Facebook’s Audience Network. Ju says that FAN will allow Facebook to “drive revenue growth without a material lift in ad loads” and he estimates $1.1 billion in gross revenue from the service in 2016, from which Facebook will get a 20% cut. Ju goes on to explain how he arrived at this figure from two directions, the first method beginning with “looking at the most recent average revenue per seller statistic” and the second method beginning with “compiling a list of user mobile engagement metrics by publisher in the U.S. to serve as a proxy for potential mobile ad volume.”
Stephen Ju has rated Facebook 13 times since October 2012, earning an 83% success rate recommending the stock and a +10.7% average return per FB recommendation. Overall, Ju has a 54% success rate recommending stocks with a +12.3% average return per recommendation.
According to SmarterAnalyst, analyst Jason Helfstein of Oppenheimer maintained an Outperform rating on Facebook and raised his price target from $88 to $100 on January 14th. Helfstein noted, “We expect strong 4Q results, driven by better engagement and strong monetization. Consistent with recent [quarters], the company will likely beat its expense guidance resulting in higher margins, in our view.” He also noted, “Organic reach is becoming more difficult, due to competition for newsfeed impressions, which is driving pricing… We also see upside from increased video adoption.”
Jason Helfstein has rated Facebook 16 times since June 2012, earning an 87% success rate recommending the stock and a +48.7% average return per FB recommendation. Overall, Helfstein has a 56% success rate recommending stocks with a +17% average return per recommendation.
On average, the top analyst consensus for Facebook on TipRanks is Strong Buy.