Facebook Inc (NASDAQ:FB)’s ad revenue growth accelerated for the second straight quarter to 41 percent yearly, while its mobile growth was not particularly great, as had been expected by some of the investors, though the future mobile growth for Facebook remains intact. Piper Jaffray gives an ‘Overweight’ rating and a $38 price target on shares of Facebook Inc (NASDAQ:FB), owing to the forementioned factors.

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As per the report from Piper Jaffray, Facebook Inc (NASDAQ:FB), like Amazon.com, Inc. (NASDAQ:AMZN) is stepping up the investment plans for 2013. The increased investment in people and products will help the social network improve on yields in “engagement and ultimately monetization”.

Explaining the reasons for the decline in Facebook’s share price after the fourth quarter earnings, the report says, investors reacted negatively to the earnings due to two primary reasons. First, most of the investors were expecting mobile ad revenues of about $350 million, but the actual reported numbers came in less, at $306 million. The other reason being, “Facebook guided for 50% total expense growth in CY13, which was $800 million above our prior expectation. The increased investment will go primarily toward hiring more employees to support and build core products.”

On Facebook Inc (NASDAQ:FB)’s mobile growth, the report believes the growth might be ’slightly’ lower than expectations, but in the long term it will prove to be a successful growth driver. For the fourth quarter, the company reported mobile revenue of $306 million against $152 million in the third quarter. In the last quarter, Facebook reported a $3 million per day run rate on mobile or $270 on a quarterly basis, for the fourth quarter the average daily run rate for the quarter increased 19 percent. Also, the increase in investments will help the company bring in new products and improve existing ones, which will help ‘top line growth’.

The Social Network reported fourth quarter revenues of $1.59 billion and PF EPS of $0.17, against the estimates of $1.51 billion and $0.15. As per the report, Facebook’s payments business benefited from an additional month of revenue, which was about $66 million. Facebook Inc (NASDAQ:FB) officials revealed earlier that an additional month is included in the quarter. If the revenue numbers are considered, excluding the numbers from the additional quarter, the reported numbers would have been roughly in-line with the expectations.

Owing to increase in investment and strong ad revenues, Piper Jaffray updates its forecasts on Facebook’s 2013 numbers, which are:

– Increasing the revenue by 2 percent due to “higher ad revenue expectations and slightly lower payments revenue.”

– Cutting the PF EPS by 19 percent on account of an “increase in total expense expectation by ~$800 million per company guidance.”

– For 2014, increasing the revenue by 1 percent due to “slightly higher ad revenue expectations and slightly lower payments revenue.”

– Lowering the 2014 PF EPS by 24 percent “due to [a] carry forward of CY13 investment levels.”