Facebook stock is estimated to potentially jump by more than 20% over the next year, thanks to its growing advertising revenue among its platforms, said the latest Barron’s report.
The report which was published on Sunday said Facebook, which closed at 123.56 a share last Friday – has seen acceleration in growth due to rising mobile ad load or the number of ads Facebook can provide its users.
Its other avenues of ad load growth besides its own bread and butter Facebook platform- such as Instagram, Messenger and WhatsApp, which have yet to fill up on ads – are expected to contribute to its total ad revenue.
Wall Street expects Facebook’s daily average users, standing at 1.1 billion now, to reach 1.7 billion in four years. Barren’s said, by then Facebook would have likely learn more on how to turn its ads into transactions, leading to growth in the advertising rate it charges.
There is a concern on its appeal to those under 25 years, who are spending lesser mobile time on the Facebook compared to other age groups. But Barron’s pretty optimistic that the company could still hit US$153 a share in a year – which would be a premium price, but not an outlandish one.
Most recently the social media giant announced that it is planning on using a specialised software to show adverts to desktop users who have installed ad blockers, as the technology begins to threaten the social network’s advertising revenue. It argued that this user management should make ads more relevant to the user, as well as more valuable to the advertiser.
Andrew Bosworth, vice president of Facebook’s ads and business platform said:
“Creative, relevant and interesting ads are a part of Facebook, and allow us to support our mission, which is why we’ll also begin showing ads on Facebook desktop for people who currently use ad blocking software.”
(Read also: Facebook’s blocking of ad blockers: A costly affair?)