Facebook Inc (NASDAQ:FB) is the growth stock of the decade, there’s no doubt about that. It’s impossible to tell how Facebook will do in the coming years, but its rise and fall and rise again have been exemplary. With the stock firmly on the rise again, Baird Research has upped its price target on the company’s stock.
The current boom in Facebook Inc (NASDAQ:FB) value started in earnest in July after the company released its earnings numbers for the quarter ended June 30. Stock is up more than 56% since that initial bump however, meaning that investors are still massively interested in picking up Facebook shares.
Facebook Q3 earnings
According to Baird analysts Colin Sebastian and Rohit Kulkarni, Facebook Inc (NASDAQ:FB) has been doing exceptionally well in the first half of the third quarter. That performance cause the analysts to boost their price target of the social networking company from $36 per share to $50.
This report is based on research the analysts did on ad buying in the first half of this quarter. They conclude that more and more retailers and other holiday sensitive businesses are seeing Facebook Inc (NASDAQ:FB) ads as a must buy, rather than a punt kick. Despite the often unknown return on investment from Facebook ads, more and more businesses are buying in.
A key reason for the optimism is mobile monetization at Facebook. That theme is unlikely to change for several years. Facebook Inc (NASDAQ:FB) is performing exceptionally well in this area, and its efforts have led more and more businesses into mobile advertising, according to the Baird research.
Q3 earnings are likely to see a boost from the positive performance of Facebook Inc (NASDAQ:FB) according to the report, and that will be clear in the Comanche’s earnings report. Baird are expecting the company to show earnings of 70 cents per share for the full year, up from 65 cents per share in the company’s last earnings report.
Facebook and robust future growth
Attempting to discern the future is not easy, but it’s the job of a stock analyst to try. Facebook will, according to this report, see robust growth in the future. That prediction is based on expectation of improved ad performance from better technology; including video and Instagram ads, international monetization, and optimization of its business model.
With the new price target and earnings estimate, Facebook Inc (NASDAQ:FB) would be trading at a multiple of around 70, a far cry from the 200 P/2012E the firm’s shares are trading at today.