Facebook, Inc. (NASDAQ/FB) has attracted over one billion pairs of eyeballs, and my stock analysis suggests its share price may really explode upward if the company can monetize this massive user base. The future for the company will clearly lie with its aggressive shift into mobile advertising, an area that numerous companies, including Google Inc. (NASDAQ/GOOG), are trying to control, based on my stock analysis. (Read "Google Could Be the First $1,000 Stock.")
The problem with Facebook is that it needs to have better control over its social networking platform. My stock analysis suggests this could only happen if the company can more effectively integrate its product into the operating system of a smartphone, which appears to be the case, as Facebook is expected to launch a new "Android"-based product. The speculation is that a Facebook phone will be produced by HTC Corporation and will focus on the integration of Facebook. (Source: Ortutay, B., "Eyes on Facebook mobile event as company evolves," Associated Press, April 4, 2013.)
In the article, the potential stakes for Facebook and other companies in social networking are growing exponentially. Spending on U.S. mobile advertising is estimated to surge 77% in 2013 to $7.29 billion, according to eMarketer. Facebook is estimated to corral $965 million.
Based on my stock analysis, I like the company's focus on pumping up its mobile advertising area. In the fourth quarter, mobile revenues accounted for 23% of Facebook's total $1.33 billion in advertising revenues, up from 14% in the first quarter. The interesting number was the company's total mobile monthly active users, which came in at 680 million in the fourth quarter, up 57% year-over-year and greater than the number of users who access Facebook via non-mobile streams. This metric bodes well for Facebook's move to manufacture its HTC Facebook phone, according to my stock analysis.
On the chart, Facebook is stalling in the mid-$20.00 range, as the market looks for evidence that the company can make money from its user base. As I have said in the past, Facebook's one billion users make the company a very intriguing investment opportunity that could explode upwards, as my stock analysis suggests.
The price is still well below its $38.00 initial public offering (IPO) price and its $45.00 high reached on Facebook's May 18, 2012 debut; but I would not be surprised to see the stock eventually head back toward its IPO price, based on my technical analysis.
Chart courtesy of www.StockCharts.com
The bottom line is: keep an eye on Facebook. If the company can stream its users to its planned HTC phone and increase its mobile advertising, then its share price could follow suit, as my stock analysis indicates.