Why Facebook Inc (FB) Could Touch $100 In 2015
After recording an impressive 43% return in 2014, Facebook Inc stock has potential to touch $100 a share by the end of this year. The optimism is justified as there are several reasons that indicate growth in the revenue and earnings of the social media giant.
The company has beaten analysts’ revenue expectations consecutively for the previous eight quarters, while beating earning expectations for the last seven.
The acquisition of Instagram in 2014 for a billion dollars was a move that was expected to bring additional revenues and earnings for Facebook. It has been rapidly acquiring businesses and social media platforms to expand its business manifold. Several analysts expect Instagram, with more than 300 million users, to bring in more than $450 million to the social media giant’s revenue in 2015.
The smartphone revolution has not shown any signs of slowing down for the past couple of years. In fact, the smartphone market is set to increase more and more, along with technological developments and innovative solutions that are coming up at a pace not recorded before.
With the growth of the smartphone market, and a gradual decline in the PC and tablet market, the world’s most favorite apps will continue to rule the mobile world. Facebook Inc’s mobile app has become one of the most favorite apps of smartphone users, while other apps that are owned by the social media giant, such as Instagram and Whatsapp, have also shared the prestige of being some of the most favorite global apps.
The phenomenal growth recorded in the East and other emerging and frontier markets has created more opportunities for Facebook to capitalize on, as millions of new users are expected to become a part of its two billion plus user base.
Monthly Active Users (MAU) of Facebook are more than 1.35 billion people. As desktops and PCs decline and Internet penetration picks up pace, the addition of several million people to the mobile world will further enhance the revenue generation of the social media company.
As the masses shift to smartphones, an addition of 70 million in MAUs of the social media giant was recorded in the last quarter. The company has been experiencing a slowdown in the growth of its users, which is why the company is making efforts to attract more and more people.
Facebook Inc. has been trying to initiate a partnership with Google Inc. to allow YouTube to be associated with the social media platform, a strategic move that is believed to help the company expand its reach; though nothing can be said about the materiality of the deal between the two giants.
Growing mobile connectivity and social networking all around the globe brings the ever-increasing growth in ad revenue. Mobile ads have recorded growth of more than 100%YoY in 4QFY14, beating the market’s expectation of 89%.
The company’s mobile ads generated revenues of $2.48 billion, while the desktop ads earned $1.14 billion. Several analysts expect Facebook to record a 43% YoY growth in ad revenues this year, bringing the amount close to $16billion.
Acquisition OfOculusAnd Development Of Virtual RealityApps
The company has announced that it has been developing virtual reality apps to enhance user experience and expand its business. The acquisition of Oculus initiated the strategy toward the development of virtual reality apps that will reinvent the way users share content such as photos and videos on the social media platform.
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