Image source: Facebook.

Another Wall Street pro is feeling better about Facebook (META 0.20%). Citi analyst Mark May is raising his price target on the stock from $148 to $158. The social media giant may command a market cap north of $370 billion and its stock price may have more than tripled since going public four years ago, but May feels that it's still the "early days" for the company and its investors.

Facebook stock may not seem cheap by most measuring sticks. It's currently trading for more than 60 times trailing earnings. The stock is trading at far more reasonable multiples of 33 times based on this year's analyst forecast, and 26 times next year's target, but those sums are still somewhat lofty. May argues that Facebook will be able to justify larger valuation multiples as investors grow less worried about a slowdown in ads and the competitive threat of Snapchat and other rising social platforms.

Facebook's ability to overcome those fears would naturally bring in more buyers, but the process may also give a boost to the dot-com darling's fundamentals. In other words, Wall Street's profit targets may be too low.

Early days

It may seem hard to swallow that we're in the early innings of this particular ball game. There were 1.71 billion monthly active users on Facebook in its latest quarter. That's a sizable chunk of the addressable market, and the adoption rate is even more advanced closer to home. A springtime survey by Pew Research Center and the Knight Foundation found that 67% of U.S. adults are active on Facebook.

One can argue that this places us closer to the ceiling than the floor when it comes to Facebook, but there are more important things than slowing user growth. Usage itself is on the rise. Daily active users keep growing faster than mobile active users, up 17% vs. 15% over the past year. This means that more people are using the site more often. The Pew survey also found that more people are now leaning on Facebook's website or mobile app as a news source. Two-thirds of Facebook users are getting their news from the social platform.

Facebook is also getting better at milking more ad revenue out of its users. Advertisers are seeing the social hub as crucial to their marketing campaigns, and they're paying more to use it. Monthly active users may have risen by a modest 15% over the past year, but Facebook's ad revenue soared 63%.

Bears are finding it harder to bet against Facebook. Short interest has been cut in half over the past year. There were 18.6 million shares of Facebook stock sold short at the end of last month, a 52-week low in the number of bearish wagers.

Facebook is a household name, but it's just starting to tap its money-making potential. There may be a lot of players sitting on its benches, but Citi's May is right about this ball game still being in the early innings.