Tuesday, May 20, 2014

Facebook Is A Strong Buy

This article was originally published by Seeking Alpha on May 11, 2014

By Sarfaraz A. Khan. Research Asst Raza B. 

Facebook has reported significant growth in user base, market share, revenues and earnings

The company is becoming more profitable due to effective management.

The company has undertaken major acquisitions that could diversify its revenue base and fuel its growth.

The social networking giant Facebook (FB) is doing everything right. The company is adding millions of users each month, is eyeing one-fifth of the global mobile ad market, has a good track record of consistent revenue and earnings growth and is investing heavily in its future. Yet the company's stock has fallen by 11% in the last three months due to the ongoing concerns regarding the technology bubble.

User base

Facebook's user base continues to grow at a robust pace due to the strong growth in mobile.

In the first quarter of 2014, Facebook reported a 21% increase in daily active users (DAUs) from last year to 802 million while mobile DAUs increase by 43% to 609 million.

The mobile monthly active users (MAUs) have crossed a 1 billion mark through a 34% year-over-year growth. The number of total MAUs has increased by 15% to 1.28 billion, and this does not include more than 200 million MAUs at Instagram.

More Mobile

The company's quarterly revenues increased by 72% from last year to $2.50 billion, driven by 82% growth in advertising revenues to $2.27 billion. Most of these advertising revenues, 59%, came from mobile. This shows that Facebook has become significantly more pro-mobile, as in the …. Read full article at Seeking Alpha