Goldman Sachs called Facebook an "asset-light tech disruptor" as the social network currently accounts for 30% of all daily mobile Internet use and is predicted to be a "long-term share gainer".
Goldman Sachs' analyst Derek R. Bingham added Facebook (NASDAQ: Facebook [FB]) to the bank's Focus List for the Information Technology sector, referring to the company's exceptional user base and the ability to effectively monetize it. This, according to Bingham, paves the company's way to the long-term growth.
According to Statista, Facebook has reported a 1.71 billion monthly active users in the second quarter of 2016 and confirmed its status of the most popular social network in the world. That is why Goldman Sachs believes that Facebook is capable of demonstrating long-term growth and stock gains.
Next to having the highest number of monthly active users, Facebook also enjoys reportedly high retention time. Bingham said that Facebook users spend approximately 30 minutes per day on the platform, what accounts for 30% of the total mobile Internet use in the United States.
“We believe this industry-leading engagement offers a myriad of ancillary future opportunities in areas such as Messenger app, Facebook M and Facebook Login,” the analyst said.
Benzinga reports that Facebook has been showing steady two-digit growth in its core measurements such as monthly active users, engagement and average revenue per user. In the last quarter, Facebook outperformed the expected revenue value, scoring $6.44 billion in revenue as compared to the estimated $6.02 billion.
As for Facebook's stock price, it has also demonstrated impressive growth results. After going public with $38 per share, the company experienced the all-time low stock value in 2012. At that time, the shares were trading at less than $18 because of the news about Facebook's interest in buying Instagram. However, over the past 4 years, the shares grew by whopping 600% reaching the level of $100s. As of writing, FB trades at $130.27 on Nasdaq.
Another reason why Facebook is likely to show long-term growth is Instagram's good performance, say The Street's analysts. When Facebook first announced its interest to acquire Instagram in 2012, the deal was severely criticized as Instagram was not showing any significant performance at the time. However, not so long ago, Instagram reported reaching 500 million monthly active users, what is expected to have a positive influence on Facebook's financials very soon.
Virtual reality is another company's development project that is likely to pay off in the not so distant future. As a quick reminder, Facebook bought Oculus VR back in 2014 and has been developing the augmented reality direction ever since.
Overall, even though the company has already showed some impressive results, analysts believe that Facebook still has plenty room for improvement.