Next Stop for Facebook: $33?

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There are no Ebenezer Scrooge wannabes at Needham this morning. The analyst firm raised its price target on shares of Facebook (NASDAQ: FB  ) from $25 to $33.

Sure, $33 isn't as high as some of the more recent upgrades. Capstone Investments analyst Rory Maher boosted his target to $35 two weeks ago. Then again, it was hard to stick to Needham's earlier $25 goal as a bull when the shares were already trading higher than that.

Like many Wall Street pros, Needham is starting to appreciate the company's improving fundamentals and it embracing the new revenue channels. Needham now sees a profit of $0.65 a share on $6.5 billion in revenue for 2013, ahead of its previous forecast of $0.59 a share on $6.27 billion. Needham is now smack dab in the middle of Wall Street's projections, as the consensus estimates are eyeing net income of $0.65 a share on $6.49 billion.

These are certainly interesting times for Facebook. After beta testing for a few weeks, Facebook Gifts is now starting to pop up as an option for the site's stateside users seeking last-minute holiday gifts. (NASDAQ: AMZN  ) may not be quivering in its boots, but even the e-tailer has to be concerned about how Facebook -- through not just the billion active users but the 140 billion active connections between those users -- knows its audience better than Amazon does.

Many analysts are also starting to come around on the potential for mobile monetization. This year's addition of Sponsored Stories -- where advertisers can slap "related posts" on newsfeeds of friends of people who "like" the brand -- has turned a challenge into an opportunity.

It's only Facebook that's getting this kind of immunity. Millennial Media (NYSE: MM  ) -- the leading mobile display advertising provider that isn't aligned with either iOS or Android -- is now trading below March's IPO price of $13.

However, Facebook has unmatched reach and stickiness. Advertisers don't have much of a choice but to go through the website if they want to reach a Web audience these days.

That's huge -- and it's why this won't be the last of Wall Street's analysts to jack up their price targets on the world's leading social networking website operator.

A world of opportunity
After the world's most hyped IPO turned out to be a dunce, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We've outlined them in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.

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Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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Related Tickers

10/9/2015 4:00 PM
FB $93.24 Up +0.77 +0.83%
Facebook CAPS Rating: ***
AMZN $539.80 Up +6.64 +1.25% CAPS Rating: ***
MM $1.75 Up +0.01 +0.57%
Millennial Media CAPS Rating: **