Facebook is now bigger in market valuation than Amazon and General Electric. Following strong Q3 results the company has been named as the sixth largest corporation in the world.
Facebook shares were up by nearly 5% for the Thursday midday session.
“We tend to have a conservative approach to fundamentals and valuation, but one name we feel comfortable and confident about is Facebook,” said Scott Kessler, an equity analyst from S&P Capital IQ.
Kessler believes that with newer product initiatives such as Instagram, Messenger, and WhatsApp, Facebook has only just started to reap the benefits of its business offerings. He also points to the company’s Oculus virtual reality technology as a catalyst for future growth.
Facebook is also being closely watched thanks to its very strong video offerings and mobile users strength which accounted for 78% of revenue this quarter.
“Any company with 1.5 billion people using its product has to be worth a ton,” Michael Pachter, Managing Director of Equity Research at Wedbush Securities said. “They’re profitable, and if they choose to harvest their profits, they could be immensely profitable. Average revenue per user will be over $10 this year and closer to $14 next year, and they’re just getting started.”
Kessler believes Facebook could soon crack the top 5 in terms of market valuation.
“We have a $130 12-month price target… When you calculate with Facebook’s outstanding shares at the end of the last quarter, you come up with a market cap of over $370 billion,” he says.