Shares of Facebook are up around 1% in premarket trading Tuesday, after BTIG released an updated equity research view of the company. BTIG maintains their “Buy” rating for Facebook, but increased its price target to $117.00, implying nearly 23% in upside. BTIG believes that Facebook still has a lot of growth in the video advertisement department, particularly with its acquisitions of Instagram, WhatsApp, and Facebook Messenger. BTIG believes there is still a lot of profit potential here as these apps still have yet to see their full monetization.
BTIG increases full year 2015 revenue estimate for Facebook
BTIG rose its full year 2015 revenue estimates for Facebook from $17.3 billion to $18.1 billion. The average consensus on the Street for full year 2015 FB revenue is $17.1 billion. Full year EBITDA estimates for 2015 also received a bump at Facebook, from $10.6 billion to $11.4 billion. Turning to full year 2016 estimates for Facebook, BTIG rose revenue estimates to $25.9 billion from $22.1 billion. EBITDA full year 2016 was also risen from $13.8 billion to $15.6 billion. Ultimately, BTIG analysts see room for growth at Facebook, as the company continues to have growth options at its disposal, particularly with the strategic acquisitions it has made over the years.
Third Point's Dan Loeb discusses their new positions in a letter to investor reviewed by ValueWalk. Stay tuned for more coverage. Loeb notes some new purchases as follows: Third Point’s investment in Grab is an excellent example of our ability to “lifecycle invest” by being a thought and financial partner from growth capital stages to Read More
Analysts see advertisers slowly shifting away from TV to online and mobile solutions, Facebook to benefit
According to BTIG analysts, “we believe that Facebook will garner material share from television advertising on both a national and local level. We believe national advertisers are becoming increasingly frustrated with linear television and will shift dollars at an accelerating rate to online/mobile platforms”. In other words, as TV’s growth continues to be flat, advertisers have a better opportunity and chance of reaching out to customers by going with advertisements in the high growth areas of mobile and online. When you think of ads online, usually Google and Facebook are two of the first names that will come to mind and FB certainly will benefit, as management looks to continue monetizing and placing ads on its other apps under its control to boost profits.
Overall, I have been saying that Facebook has a bright future for some time now. The most appealing aspect of Facebook to me has to be their acquisitions. Facebook’s flagship platform is certainly valuable and well liked, but Instagram, WhatsApp, Facebook Messenger, and Oculus are the areas of Facebook that will drive the monster growth. Facebook continues to position itself as a frontrunner for the tech industry and they certainly are positioning themselves for the long term.