A Three-Part Bullish Case Why Facebook Inc (FB) Is a Solid Investment
When it comes to social media titan Facebook Inc (NASDAQ:FB), founder and CEO Mark Zuckerberg did not become a fast billionaire by playing it safe. With time and legacy on his titan’s side, Facebook has also mastered the art of fixation, hooking the public’s attention, integrating seamlessly into the way people of all ages relate to one another every day.
Last year, the man behind Facebook’s extraordinary leaps and bounds had alerted investors of a meaningful waning of revenue growth come 2017, with core Facebook needing to go back to the drawing board to find new ways to connect advertisers to users on the site. Yet, the time has arrived, and now halfway into the no-longer-new year, there are three key reasons no investor needs to be hesitating about buying Facebook stock:
- Those concerns of pesky advertising problems have been put at bay, when taking under account the titan has been outclassing Nasdaq in the first half of 2017 already, bringing in beyond $30 billion worth in sales in a year’s time. Meanwhile, the Street is angling for an added 62% boost this time next year. True, there is only so much space left on the News Feed for maximizing advertisement prospects. Yet, between Messenger, the advantageous acquisition of Instagram, and a new strong shift to video, Zuckerberg’s titan is managing to shrug off apprehensive shackles. How? Through the very skill that has led the company from college dorm stroke of genius to leader of the tech world: masterful innovation and savvy evolution. With a future foray underway into the enticing world of virtual reality, Zuckerberg cites a desire to put a social spin on the virtual element that keeps speeding down the tracks as the future of who succeeds and fades away in the tech landscape.
- Facebook has history backing its success, exhibiting a stellar showing over a long period of time, which strengthens the bullish case that this stock is the one to beat. The tech innovation king does not appear to be slowing either. In fact, any sell-offs flaring in the tech-verse easily translate to advantageous buying opportunities rife for the picking. For those that have valuation questions for Zuckerberg’s brainchild, the contention can be spun as another positive for the bulls, offering another reason to buy: compelling, affordable valuation. Shares might not be cheap, but they are certainly not as expensive as they could be if investors were simply assessing long-term scale prospects- perhaps due to Zuckerberg’s note to be wary on a sales dip. Shareholders are not likely to leap to overbuy the stock with slight risk in the air. However, up until now, Facebook’s growth only continues to escalate, in spite of any speed blocks that could trip up a giant less large. This is not a stock in its initial public trading days, but rather a veteran of its time that knows how to hit refresh and open windows for revenue expansion. A testament to Facebook’s long-term strength lies in the very year with the ominous prediction for a substantial slowdown, the first quarter print of the year released in May marks the company’s eighth consecutive revenue beat. It all comes down to the effectiveness of video as an exploration of advertising that has saved the day. Furthermore, Instagram has been an instrumental asset to the company’s ability to capitalize on revenue growth.
- Most consider Facebook fresh competitor Snapchat’s arch rival and biggest threat to taking down the popular Snapchat app parent company- and not the other way around. Facebook’s user growth DAUs rose to 1.28 billion this past quarter, marking an 18% year-over-year surge forward, and this is in a year where Snapchat made its big public trading debut. Snapchat may be the fancy new toy at the tech round table, but the New York Times points to Instagram as “Facebook’s next Facebook,” and Zuckerberg’s fundamental weapon to remaining relevant in a Snapchat-competitive era. Essentially, Zuckerberg is mimicking a game of copy cat with Insta Stories, but in enticing fashion, and as long as it continues to work, Snapchat poses no real ominous risk to the titan. The main area in Snapchat’s favor is the interest of the millennials. Overall though, in the ocean of guppies and sharks, Facebook has made its dominance known through the years, and through cutting edge play after play, it is loud and clear: Zuckerberg has zero intention of relinquishing ace power any time in the coming future.
Predominantly, the majority of Wall Street agrees that Zuckerberg’s titan presents unique value, considering TipRanks analytics indicate FB as a Strong Buy. Out of 32 analysts polled by TipRanks in the last 3 months, 29 are bullish on Facebook stock while 3 remain sidelined. With a return potential of 15%, the stock’s consensus target price stands at $170.90.