Facebook Inc (NASDAQ:FB) shares rose almost 5 percent on Monday after positive reports from analysts. A team of JPMorgan analysts reiterated their overweight rating on the stock and increased their revenue estimates slightly. Stifel Nicolaus analysts also issued a positive report on the stock, say that Facebook Inc (NASDAQ:FB) will grow more quickly than Google Inc (NASDAQ:GOOG) over the next five years.
Facebook Engagement Is Positive
One of the big concerns investors have had about Facebook Inc (NASDAQ:FB) is user engagement. However, JPMorgan analysts said their analysis of the latest data from comScore indicates that services which compete with Facebook are “having only a modest impact on time spent on Facebook.” They said they also see signs that rising mobile usage is keeping engagement on the network “fairly steady.”
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Data from comScore indicates that Facebook Inc (NASDAQ:FB)’s Internet minutes rose from 12 percent to 15 percent over the last year. However, Instagram, Twitter, Snapchat and WhatsApp combined rose from .6 percent to 2.5 percent, barely taking a chunk out of Facebook at all.
Better Brands On Facebook’s Ad Platforms
The analysts also note that there appears to be some bigger brands representing themselves on Facebook Inc (NASDAQ:FB)’s ad platform. They said in their view, McDonald’s Corporation (NYSE:MCD) and The Procter & Gamble Company (NYSE:PG) “have been more visible” on Facebook’s ad platform during the second quarter.
They noted that both companies have run click-to-play video ads, and they believe that this will help Facebook as it continues to build its ad platform. They believe the company will be “a primary beneficiary” as companies move their advertising dollars to mobile and social. They also said they like the “simplification of ad units,” which the company recently announced.
Facebook Growing Faster Than Google?
Stifel Nicolaus analyst Jordan Rohan believes Facebook Inc (NASDAQ:FB) will actually grow faster than Google Inc (NASDAQ:GOOG). He said Google has been selling for around 10 times its expected earnings, while Facebook has been selling for around 9.4 times its earnings. He believes Facebook’s earnings will surge 25 percent each year for the next five years, while Google Inc (NASDAQ:GOOG) will only grow its revenue by a percentage in the low teens.