Facebook Inc (NASDAQ:FB) has enjoyed 20%-plus growth since July, and thanks to wise decisions by the executive team, Facebook stock has even more room to run.
Facebook recently announced a new partnership with Indian telecom giant, Reliance Communications. The deal features a new application, Internet.org, which provides free access to Facebook and more than 30 other apps (data charges will be waved). FB is committed to growing its user base and the deal opens a huge market for new subscribers.
FB currently has 112 million users in India, but the potential is 10 times that number considering the country’s population tops 1 billion. Sure, it’s a steep road to climb as the Indian infrastructure needs work, (currently only android devices can use the internet.org application) but it’s just further proof that Facebook is dedicated to growing the business.
Facebook stock holders can also appreciate the idealistic move in teaming with sector rival LinkedIn Corp (NYSE:LNKD) to get more women involved in tech. But it’s more than a PR move — the networking rivals believe these efforts will spur greater efficiency and creativity in the workplace.
Buy Facebook Stock — The Numbers Don’t Lie
Just last month, Facebook reported annual revenues in excess of $12 billion — a 58% increase year-over-year.
Yes, I’ve seen the caution flags flying. Declining growth in ad revenue. A leveling off in engagement. But analysts still see Facebook growing revenues at more than 30% annually over the next couple of years, and earnings are expected to jump by 32% from this fiscal year to next.
While that’s slower growth than we’ve come to expect from Facebook, it’s still significant, and importantly, the market isn’t pricing in unrealistic expectations — FB stock is trading at 30 times next year’s earnings, which while still expensive compared to the broader market, is fair when you compare it to the even more bloated P/Es of growthier stocks like LinkedIn and Twitter Inc (NYSE:TWTR).
Moreover, analysts are bullish on Facebook stock, too.
Of the 47 firms covering Facebook stock, 41 give FB a “buy” or “strong buy” rating, and six say it’s a “hold” — meaning there are no “sell” calls to be found. Their mean target of $90 represents roughly 20% upside from here, though the most optimistic of analysts thinks Facebook stock could return 40%.
The time to join the FB shareholder team is now. Click the “buy” button on Facebook stock today.
As of this writing, Scott Michnick did not hold any interest in the aforementioned securities.
