Facebook Inc (NASDAQ:FB)
Although Facebook has been caught up in market’s volatility with its shares down about 5% in last month the social media networking service’s long-term success is, still, unrivaled among tech companies of this size. Mostly because the company’s stock witnessed substantial gains this year.
The information technology sector dragged on the S&P 500 on Tuesday while stock struggled to hold onto gains. Within this group, Facebook was one of the worst performers with 3% decline in shares. According to the stock market experts, FB will continue to climb gradually with occasional tumbles.
When it comes to FB, the biggest fear for most analysts is fleeing younger users would hurt their value. For example, iStrategy Labs digital agency released data which showed that Facebook saw a decline of users of about 25.3% in period between 2011 and 2014. In the same timeframe, Facebook witnessed decline of population aged between 18 and 24 by 7.5%.
However, in order to understand FB climb it is needed to look past the actual platform. Facebook as company goes beyond monthly active users and new signups. Even if younger social media users leave FB, Zuckerberg’s brilliance found a way to still keep them from straying too far. He did so by buying WhatsApp and Instagram. For example, in the period between April and September, WhatsApp saw an increase of 11% or 100 million in new monthly users. It is estimated that about 900 million people around the world use WhatsApp. On the other hand, according to the latest reports, Instagram has more than 400 million users.
In order to monitor and anticipate Facebook stock’ growth, analysts recommend closely monitoring the values of both these apps owned by the same company.
What can we expect from Facebook stock in future? According to Andrew Keene of KeeneOnTheMarket.com we can expect FB stock to hit the gigantic $100.
Currently, Facebook is trading between $88 and $93 per share and analysts suggest the tumble in prices won’t last for too long. The market itself has been very weak for quite some time; on the other hand, FB stock have been weak for only a short period of time. Therefore, if market can turnaround, FB can definitely move higher.
Steady growth of FB stock’ value is ensured by the factors listed below:
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Facebook is unrivaled social media service with more than 968 million active users
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Besides a few tumbles this month, Facebook witnessed amazing growth
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FB also involves a highly profitable ad business that gives Google (NASDAQ:GOOGL) AdSense a run for its money.
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The company has established a mobile dominance
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The company has more than $14 billion in cash and securities and its corporate structure allows for acquisitions such as purchasing WhatsApp to be made with stock-based deals only, which means it would take a heap of trouble to take down some company whose finances are strong as FB.
Moreover, Facebook is expected to report its third-quarter earnings at the end of October which will give its stock additional boost and it is quite possible to see FB stock reach $100 by November.