It seems Facebook (NASDAQ:FB) can't seem to stay out of the spotlight -- and not in a good way. Ever since the revelation that the company allowed user data to be exploited by the now defunct analysis firm Cambridge Analytica, things seem to have gone from bad to worse.

Facebook CEO Mark Zuckerberg was forced to testify before Congress about the scandal, and just this week the company confirmed that it was being investigated by several U.S. government agencies for culpability amid allegations that the improper data use may have been more widespread than previously disclosed. The Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ), and the Federal Trade Commission (FTC) are among numerous regulatory bodies worldwide looking into the matter. 

In spite of these recent events, one analyst thinks investors may be disregarding a massive potential growth driver for Facebook -- that of its photo- and video-sharing app, Instagram.

Fashionably dressed woman taking a selfie against a striking pink wall.

Image source: Getty Images.

An absolute monster

BTIG analyst Richard Greenfield has raised his price target on Facebook to $275, from its previous level at $175. Greenfield's target is the highest among his Wall Street brethren, one of only two analysts rating the stock that highly. In a note to clients, the analyst said he believes users "simply could not care less" about the privacy scandal, and "despite all the noise around Facebook, Instagram has become an absolute monster."

The analyst focused on three aspects of the Instagram story that he believes should make investors more bullish on the platform -- and on Facebook.

1. Monstrous growth -- with more ahead

Greenfield pointed out that Instagram hosts over 1 billion users per day, and Stories is seeing rapid adoption, with over 400 million visitors on a daily basis. "We find it stunning that Instagram Stories in just two years since launch has become twice as large as Snapchat with monetization still in the early innings." 

It's also notable that Facebook only acquired Instagram in 2012, and recently its user growth has been accelerating. As my colleague Evan Niu pointed out, "It took about five months to get from 700 million to 800 million [users], and nearly nine months to get from 800 million to 1 billion." That bodes well for the platform's continued growth.

A man in business attire with a microphone standing in front of the Instagram IGTV logo.

Instagram co-founder Kevin Systrom announces IGTV. Image source: Instagram.

2. Successful new features

Instagram has a history of success when it comes to introducing new functionality for its users. Greenfield points to the recent debut of Instagram TV (IGTV) long-form video service as an example of new products seeing adoption by users. "The innovation keeps accelerating at Instagram, with IGTV launched last month. Within 24 hours of launch our IGTV feed was filled with more content than we could possibly consume." 

Other recently added features include stylized mentions and gif stickers, follow hashtags, and focus mode, which helps create the popular bokeh camera effect.

3. A Powerful tool for advertisers and digital sellers

Greenfield also pointed out that Facebook has long sought to blur the line between content and advertising. "Worth noting that Facebook, since its earliest days as a public company, has talked about the goal of ads becoming content, which has actually happened on Instagram -- everyone loves the ads, allowing for greater ad load." The increased engagement also allows Facebook to charge more for each ad.

The analyst went on to gush about the quality of the advertising and the massive opportunity it created. "The ads are so good, in fact, that Instagram is quickly becoming the most powerful and valuable mall in the world where you not only browse, but can buy anything you see." Instagram has been adding a host of e-commerce options that allow users to makes purchases by clicking on a shopping bag icon within the app when a product is available for purchase. The ability to integrate e-commerce functionality taps into a growing trend worldwide, which will further enhance the experience for users and advertisers alike.

It's all about the Benjamins

Each of these points leads to one inescapable conclusion -- that Instagram will be Facebook's next massive growth opportunity, and Greenfield isn't the only one who thinks so. KeyBanc's Andy Hargreaves believes that Instagram could generate $8.9 billion in revenue this year, with that number growing to $22 billion by 2020, citing its "young and engaged audience." 

Facebook's privacy scandal isn't going away anytime soon, but these analysts think investors should focus on the "monster" opportunity of Instagram. I think they're onto something.

Danny Vena owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.