Facebook Inc (NASDAQ:FB)’s price target has been raised to $50, with a ‘Buy’ rating, by analysts Jordan Rohan and Michael Purcell from Stifel. They are citing unexpected growth rates with which the shares beat the earlier target of $38.01. Analysts feel that shares will continue to surge as long as the company keeps outperforming the consensus estimates on revenues with significant incremental margins.
Analysts believe the trend will continue in the third quarter with Facebook Inc (NASDAQ:FB) receiving good response from both brands and response marketers internationally.
Mobile revenues to excess $1b in 4Q
The social networking giant has a massive user base of 700 million daily average users (DAUs) and over 1.1 billion monthly active users (MAUs). Average revenue per user (ARPU) for Facebook Inc (NASDAQ:FB) saw a hike of over 30 percent in all the regions during the previous quarter. Additionally, Facebook is also capitalizing on Mobile, blowing away the initial concern, and the segment has boosted the revenues of the company by around 41 percent. Analysts are expecting mobile revenues to exceed $1 billion in the fourth quarter.
Facebook Inc (NASDAQ:FB) is ruling a major portion of market shares from display, search, television and media. It reached over 1 million advertisers, with all of the Ad Age 100 brand advertisers represented and hundreds of thousands of small/medium-sized local businesses, as well.
Estimates raised for Facebook
Stifel analysts have raised the estimates for 2013 due to marginally higher ARPU assumptions, and 2014 revenues are estimated to rise 2 percent to $9.82 billion with EBITDA surging by $242 million to $5.63 billion. For the third quarter, analysts revised the revenue estimate to $1.99 billion, which is $100 million higher than the consensus view.
Evercore Partners also up the PT
A couple of weeks back, analyst Ken Sena at Evercore Partners upgraded his price target on Facebook Inc (NASDAQ:FB)’s stock from $34 to $45 and has assigned an ‘Overweight’ or ‘Buy’ rating.
In support of his raised targets, Sena cited drivers like an improvement in ad targeting, attractive ad pricing, and stable-to-growing user engagement that will drive the revenue further. Recently, Facebook came up with larger ad formats than before.
Sena also raised the third quarter revenue estimates by 6 percent to $1.94 billion, which is more than consensus estimates. Additionally, the analysts increased the estimates on Facebook’s mobile revenue by 8 percent to $836 million, which was over the average estimates of $756 million.