Workplace by Facebook Will Help Drive FB Stock Price to $250

FB stock priceWorkplace by Facebook launched on Oct. 10, and it's the newest catalyst that will help drive the FB stock price to $250 per share by 2020.

Originally titled "Facebook at Work," Workplace is a business communication platform that allows companies to communicate more effectively.

Before we get to our FB stock price target of $250 per share, we wanted to make sure our readers knew everything there is to know about Workplace.

Here's more on Workplace by Facebook...

What Is Workplace by Facebook?

Facebook Workplace is part of the growing sector of company collaboration tools.

For example, the startup "Slack" launched in August 2013 and allows companies to create chat rooms organized by topic, direct messaging, and searchable content like files and conversations.

According to Fortune, Slack had annual recurring revenue of $64 million as of February.

But Facebook has an advantage over Slack that can help the FB stock price climb: It already has 1.71 billion monthly active users (MAUs).

And Money Morning Director of Tech & Venture Capital Michael Robinson is not deterred by the crowded field.

"I think it's a smart value-added move to build more revenue off its amazing client base with what could be a sticky and high-margin app," Robinson told me today.

"Yes, the field is crowded with competition for this kind of workplace place communications tool with firms like Microsoft, Jive, and Slack. So, at the very least this is a great defensive play that may turn the tide in its direction," Robinson said.

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Unlike your personal account, your Facebook Workplace account is only visible to people in your company. Workplace can be used on mobile devices or the web, and it allows companies and groups to:

  • Share group discussions
  • Create personalized News Feeds for employees and group members
  • Use voice and video calling through the app and on the web

This helps companies cut down on travel expenses from meetings, collaborate in real time, and quickly share important information.

But of course, the big question is how much will Facebook's Workplace cost...

How Much Does Workplace by Facebook Cost?

New companies can get a free three-month trial. And if your company is a nonprofit or educational institution, it's completely free.

After the free three-month trial, this is the price breakdown for Workplace:

  • $3 per monthly active user, up to 1,000 users
  • $2 per monthly active user, for 1,001 to 10,000 users
  • $1 per monthly active user, for 10,001+ users

According to Facebook, there are no long-term contracts for Workplace.

This an appealing pricing model for larger companies, because they pay less when more than 1,000 employees use Workplace.

Now that you know everything there is to know about Workplace by Facebook, here's how the new communication platform will help the FB stock price climb to $250 per share...

How the FB Stock Price Will Climb to $250

At first glance, Facebook charging between $1 and $3 for Workplace wouldn't appear to generate a lot of revenue.

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But Workplace already has huge clients, such as Starbucks Corp. (Nasdaq: SBUX) and the Royal Bank of Scotland Group Plc. (NYSE: RBS).

Starbucks currently has 238,000 employees, and the Royal Bank of Scotland has more than 92,000 employees.

From just those two companies, Workplace could generate $3.9 million a year if every employee uses Workplace.

Not every employee at these companies will need to use Workplace. But intelligence and advisory firm Compass Intelligence projects the global enterprise messaging app market will hit $1.9 billion in annual revenue by 2019.

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Robinson points out that if Workplace has just 200 million users (11.7% of Facebook's total MAUs) paying $1 a month, Facebook will generate $2.4 billion in revenue a year.

Currently, there are over 1,000 organizations that use Workplace. That will expand as more and more companies implement new communication platforms like Workplace.

"Remember, many professionals use LinkedIn Corp. (NYSE: LNKD) for more professional communications outside the office, but they check on their Facebook pages quite a bit during the day, making it a natural add on," Robinson told me.

And aside from the billions in revenue Workplace can generate, there are also three other revenue sources that will help the FB stock price skyrocket...

FB Stock Price Will Climb from Instagram, Oculus VR, and Messenger/WhatsApp

In 2016, Facebook generated between $650 million and $750 million in revenue from Instagram. In 2021, research site Statista projects Instagram will generate $9.5 billion in revenue.

That's a potential revenue increase of 1,361%.

Facebook stock

Facebook will also generate billions in revenue from its virtual reality (VR) company, Oculus VR.

CEO Mark Zuckerberg paid $2 billion for Oculus VR in 2014, but it will soon pay for itself. By 2020, research company Tractica believes $21.8 billion in sales will be generated from sales of VR head-mounted displays, VR content, and VR accessories.

And there's one more reason why the FB stock price will climb...

Facebook is currently experimenting with monetizing its communication platforms, Messenger and WhatsApp.

Messenger lets you order plane tickets, book a flight, and even catch an Uber ride.

Deutsche Bank AG (USA) (NYSE: DB) analysts believe that by 2020, these messaging platforms could generate $10 billion annually for Facebook.

With all these impressive revenue sources, Robinson projects the FB stock price will trade for $250 per share by 2020. From today's opening price of $128.21, that's a potential profit of 94%.

The Bottom Line: Workplace by Facebook could generate billions in revenue, helping the FB stock price skyrocket. With less than 10% of Facebook's total MAUs using Workplace at $1 per month, Workplace could generate $2.4 billion in revenue. And with Instagram, Oculus VR, and Messenger/WhatsApp generating billions in revenue, the FB stock price will skyrocket to $250 per share in less than four years.

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