GBH Insights analyst Daniel Ives approaches high performing technology, a.k.a. “Fang” stocks from a confident lens when glancing ahead to what is in store for the tech-verse come 2018.
Believing that “FANG stocks [are] still in [a] pole position in tech,” Facebook Inc (NASDAQ:FB) in particular races towards pulling off yet another strong quarter in its fourth quarter, especially in terms of monthly active users, which rise 2 billion “and counting.”
Anticipating killer momentum in the new year for what represents an “all-important” gains maker for the social media titan, the analyst maintains a Highly Attractive rating on FB stock with a valuation target of $210, which implies an 18% upside from current levels. (To watch Ives’ track record, click here)
“While there continues to be evolution around Facebook’s ad growth model and monetization strategy, it appears the company is executing extremely well in the field (e.g. engagement, MAU growth, ad growth) and all key metrics look healthy heading into 4Q and 2018 based on our recent checks and GBH survey work,” writes the analyst.
Additionally, the analyst keys into Instagram gains as well as monetization as a powerful duo that will open the door to a positive 2018 backdrop for the company. As far as Ives is concerned, the Street is underestimating Facbook’s gem of an acquisition Instagram, which is on track to hit beyond 1 billion MAUs by the first half of the new year. This could translate to massive meaningful growth for CEO Mark Zuckberg’s brainchild throughout the next 12 to 18 months when taking under account advertising opportunities at play. Considering Facebook has a game plan for prioritizing investments in 2018, the analyst believes new growth endeavors will be crucial to Facebook developing its essential drivers.
On a broader tech industry note, “Overall, we continue to be very bullish on secular tech themes heading into 2018 around streaming/content, e-commerce growth, online ad growth, and the transformational cloud shift among enterprises. While the regulatory environment, corporate tax changes, and the macro backdrop create both opportunities and challenges for these FANG names as well as the rest of the tech sector, we believe the underlying fundamentals, spending environment, and consumer/enterprise landscape looks very favorable heading into 2018 for the tech sector and FANG names in particular,” Ives contends.
TipRanks illustrates a strongly upbeat analyst consensus on this social media titan, with 31 out of 32 analysts in the last 3 months bullish on the FB empire and just 1 bearish. With a solid return potential of 19%, the stock’s consensus target price stands at $211.34.