On Monday, Facebook Inc. (Nasdaq: FB) celebrated its three-year anniversary as a publicly traded company. A celebration was indeed in order.
The Facebook stock price today is trading around $80. That's a 110% climb from FB's $38 IPO price.
Facebook's valuation at the time of the IPO was $104 billion, making it the most valuable U.S. company. Facebook instantly became the 23rd-largest U.S. company by stock market capitalization. According to Capital IQ, Facebook's market cap at the time was bigger than tech heavyweights Amazon.com Inc. (Nasdaq: AMZN) and Cisco Systems Inc. (Nasdaq: CSCO).
Today, Facebook has a market cap of $226 billion, more than double what it was three years ago. FB presently is the 17th-largest U.S. company by market cap. It lands on the list of 50 largest publicly traded U.S. companies alongside marquee names like tech titans Apple Inc. (Nasdaq: AAPL), Microsoft Corp. (Nasdaq: MSFT) and Google Inc. (Nasdaq: GOOGL); energy behemoth Exxon Mobil Corp. (NYSE: XOM); and conglomerate Berkshire Hathaway Inc. (NYSE: BRK.A).
This is a welcome change from September 2012, when the Facebook stock price was as low as $17.55. Now FB stock is a favorite among Wall Street analysts.
Of the 51 analysts covering the stock, 39 rate FB "Buy." Five have an "Overweight" rating on shares. Six rate shares "Hold." And the one analyst who had maintained a "Sell" rating on shares over the last several months has changed his/her stance. According the The Wall Street Journal, there are currently no "Underweight" or "Sell" ratings on FB shares.
"Many on the Street just don't trust Facebook because they still think of it as a social networking site for young people," Robinson said in February. "Facebook has moved well beyond its early days as a site just for teens and young adults to friend each other online. Facebook is now, indisputably, the world leader in the social networking market, one that forecasters IBISWorld estimates at $9 billion."
And there are at least nine more reasons to be bullish on the Facebook stock price today...
Facebook Stock Price Today High, but More Upside Ahead
Here's a list of why the Facebook stock price is headed higher...
- A big concern for Facebook a couple of years ago was its lack of mobile ad revenue. In May 2012, revenue in the space was next to nothing. In Q1 2015, mobile advertising revenue made up a whopping 74% of the social network's total ad revenue. That was up from 60% at the end of 2014.
- Roughly 87% of Facebook's monthly active users tapped the site via mobile devices in Q1 2015, up 24% year over year. That translates into 1.25 billion of FB's total monthly active user count of 1.44 billion. User tally in Q1 2012 was 901 million.
- FB's user retention has been steadily climbing. Facebook presently boasts 936 million daily active users. That's 65% of its total monthly active users. A year ago, the number of daily active users was 63% of its monthly active user base.
- Facebook has at least three huge platforms that have barely been tapped as a revenue stream. Instagram, WhatsApp, and Messenger serve more than 1 billion people and could eventually significantly contribute to FB's earnings and revenue. Citigroup analyst Mark May said in April Instagram and WhatsApp are both on their way to become billion-dollar businesses.
- Since launching in April, the free video calling feature for Facebook's Messenger platform is now available nearly worldwide. That should keep teens using the site. Video messaging is deemed the fastest growth area among teens.
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- Facebook's virtual reality division Oculus is set to change social reality. In collaboration with researchers at the University of Southern California, FB's Oculus team has demonstrated a way to track the facial expressions of someone wearing a virtual reality headset and transfer them to a virtual character.
- Facebook continues to expand its scope and reach. FOX News and Facebook will host the first Republican primary debate of the 2016 presidential race on Aug. 6 in Ohio. The format will allow FOX News viewers and Facebook users to share video questions via the social media site. Some of those questions will be used for the debate, the network said Wednesday.
- Facebook's Instant Articles will change how people interact with content from large media brands. Standard news stories take an average of eight seconds to load on mobile devices. That makes them the slowest single content type by far on Facebook, according to the company. With Instant Articles, publishers can choose to sell ads and keep the revenue or use Facebook's Audience Network to fill ad inventory. Publishers also get access to traffic data and analytics. However, they don't have control over other media that runs alongside their featured articles.
- Earlier this week, FB made a strong push into content publishing with the hire of Tugboat Yards' CEO Andrew Anker. A California-based startup, Tugboat provides tools for small and medium-sized web publishers to accept payments from their readers. Anker said he is shutting Tugboat down on June 30 to join FB. Accepting payments from readers is a growing business. It enables independent content creators (writers and video producers) to turn their passions or interests into a career.
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