Facebook: Curing Boredom for Users and Investors?
Not too long ago, the social media craze was considered the latest fad involving an Internet connection. Its introduction to Wall Street even brought back memories of the disastrous dotcom bubble. However, several popular Internet names have been among the best performers in the market this year, and the largest social network continues to cure boredom around the world.
Facebook’s (NASDAQ:FB) initial public offering was tagged as a failure from the beginning. The social network went public last year at a price of $38 per share and ultimately hit a low of $17.55. Despite the complications, Facebook shares recently surged to as high as $50 and received an upgrade pointing to a much higher price.
Earlier this week, analyst Richard Greenfield from BTIG upgraded Facebook from Neutral to Buy with a price target of $68, representing more than 30 percent upside. The price target is based on 20x 2015 EV/EBITDA, a slight multiple expansion from Facebook’s current 19x 2014 EV/EBITDA. Greenfield is also taking a more bullish view on revenue. For 2014, Facebook’s revenue is estimated at $10.5 billion, compared to the prior $9.3 billion. In 2015, he expects revenue to total $14 billion, up $3 billion from the previous estimate.