Facebook rallies on Stifel PT hike


Stifel's Jordan Rohan has upped his Facebook (FB +3.5%) PT to $82 from $72, while reiterating a Buy. Shares are close to their all-time high of $71.44.

Rohan is upbeat about Facebook's ability to continue growing its ad spend share, and says checks suggest "marketers view Facebook as a strategic communications platform, capable of establishing and reinforcing relationships with consumers."

At the same time, he admits to finding the $19B valuation Facebook assigned to WhatsApp "perplexing."

Rohan upgraded Facebook to Buy last June, six weeks before the company's blowout Q2 report. His PT at the time was $29.

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Comments (38)
  • Earl the Squirrel
    , contributor
    Comments (22) | Send Message
     
    Stifel is one of FB's underwriters. Of course they are upping their target.

     

    http://bit.ly/MNC2oE
    5 Mar 2014, 11:35 AM Reply Like
  • howieLONG
    , contributor
    Comments (42) | Send Message
     
    Sell, cover, sell, cover and repeat.
    5 Mar 2014, 11:44 AM Reply Like
  • duggard
    , contributor
    Comments (107) | Send Message
     
    That is exactly what I am doing. I bought Apr 19 72.50 puts today.
    5 Mar 2014, 01:42 PM Reply Like
  • verenous
    , contributor
    Comments (138) | Send Message
     
    Why not
    5 Mar 2014, 12:14 PM Reply Like
  • 81george
    , contributor
    Comments (297) | Send Message
     
    19 billion WA perplexing and yet FB a buy? Comes 2nd Q reporting FB will face the reality. Short and holding till see 50.
    5 Mar 2014, 12:32 PM Reply Like
  • RobbyRob
    , contributor
    Comments (362) | Send Message
     
    Agreed. Media buries and ignores stories about click farms, targeting teen girls...the former just might be a class action lawsuit one day when companies find that x% of their paid clicks are fake. See SF Gate / Business Insider recent article below...amazing what people ignore until it can't be pushed under the rug anymore. Like Enron. With WhatsApp purchase, market cap over 200 billion dollars.

     

    http://read.bi/1fHg2J4
    5 Mar 2014, 01:00 PM Reply Like
  • Hoang6
    , contributor
    Comments (358) | Send Message
     
    And, we are those who get toasted, even if we have already stayed miles away!
    5 Mar 2014, 01:58 PM Reply Like
  • drpersky@drpersky.com
    , contributor
    Comments (126) | Send Message
     
    The referenced article ends with, "Brar declined to pay the bill. He told Business Insider that his magazine titles did not generate enough revenue to cover $600,000. His credit with Facebook was ruined. He offered to pay cash in advance for future campaigns but Facebook demurred. Facebook did not sue Brar or pursue him further for the money, however."

     

    If Brar is so unhappy with his FB advertising it is certainly very strange that he wants to run more ads with cash up front. A much more relevant article is "The 30 Biggest Advertisers on Facebook", significantly I doubt that one of those advertisers, a small company called Google would be pouring millions into unsuccessful ad campaigns based on "fake" clicks. Be well.

     

    Doc

     

    http://read.bi/1f2KOq9

     

    Read more: http://read.bi/1l4gcJS
    6 Mar 2014, 01:36 AM Reply Like
  • Hoang6
    , contributor
    Comments (358) | Send Message
     
    Wow, one guy says it'll go up and boom, it goes up. How easy rich people get richer!
    5 Mar 2014, 01:39 PM Reply Like
  • Tonychan88888
    , contributor
    Comments (2) | Send Message
     
    Think FB will crash down soon. Hear they have internal problems.
    5 Mar 2014, 02:25 PM Reply Like
  • Manitobatex
    , contributor
    Comments (1194) | Send Message
     
    Yup....their vault is too small.

     

    Lookout....the drones are coming..........FB flying high !!!
    5 Mar 2014, 05:20 PM Reply Like
  • Tonychan88888
    , contributor
    Comments (2) | Send Message
     
    Just a private small investor.
    5 Mar 2014, 02:25 PM Reply Like
  • superfob
    , contributor
    Comments (4) | Send Message
     
    Jordan Rohan is one of the few analyst I will follow.
    5 Mar 2014, 02:27 PM Reply Like
  • bgold1955
    , contributor
    Comments (2348) | Send Message
     
    Ad revenue soared for the last 3 qtrs. Something is working right. Businesses are not stupid with their advertising bucks.
    5 Mar 2014, 02:36 PM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    Businesses will test things for a year and see how they are working out for them.
    5 Mar 2014, 03:30 PM Reply Like
  • 22643611
    , contributor
    Comments (2099) | Send Message
     
    @bgold1955, what people often loose sight of is advertising is
    a 100% write off for companies.
    Advertising will continue to grow on FB because of the competition
    between retailers, etc...
    5 Mar 2014, 03:36 PM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    yes, online retailers dont track things like ROI, totally right 226. I mean what fool would check how many clicks turn into sales? Everyone knows that people in marketing just stick their fingers in the air and hope. Nothing has changed since the Mad Men era. Kind of like how people who invest in Facebook dont track things like market value. Everyone just throws their money out there and hopes!
    5 Mar 2014, 04:49 PM Reply Like
  • 22643611
    , contributor
    Comments (2099) | Send Message
     
    @monfere, yes just pick and choose the parts of my post which fit
    your argument and overlook the parts which prove my point.

     

    Must really hurt to be down almost 40 points on a short.

     

    But keep posting falsehoods as you did regarding Zuckerbergs sale
    of shares.

     

    You hysterically tried to make the argument that Zuckerberg selling a whopping 11% of his shares (mostly preplanned at intervals so he has nothing to do with it) that he agrees with you in regard to FB being overvalued.
    Even a simpleton could do the math and realize he agree's (using your nonsensical theory) with the longs by holding 89% of his shares.

     

    Desperate people post desperate things.
    5 Mar 2014, 06:11 PM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    Good boy! now, fetch the stick!
    6 Mar 2014, 08:32 AM Reply Like
  • Govino
    , contributor
    Comments (4) | Send Message
     
    Just read the report, have to admit not seen many reports with this little rigor. They have raised FB EPS target for 2016 by 12% and applied a 35x multiple for 2016 EPS to arrive at the PT. What is the logic for this multiple when he is projecting top line growth to slow to below 20% in 2016 and one can imagine only lower after afterwards. I don't even believe the baseline projections. Plus given crazy deals like Whatapp, there is no guarantee there won't be any others, which will be EPS dilutive.
    Seems to me there is now a rat race amongst Wall Street analysts to try and defend the absurd valuation. Am sure they are hoping they will get a piece of action from other crazy deals Mark Z is likely to do. Urge the readers to read the article on FB valuation & Whatsapp deal by Prof Damodaram of NY Stern School of Business. Much more balanced that the 'independent' analysts from Wall Street.
    5 Mar 2014, 03:34 PM Reply Like
  • jujy
    , contributor
    Comments (33) | Send Message
     
    With the current PE multiple and high expectations, if Mr. Zuckerberg put one billion dollar of adds out of his own pocket on, let say rats meat, his 17% shares in facebook will go up in value by approx 5 milliard dollars!!!
    5 Mar 2014, 03:41 PM Reply Like
  • BAHAMAS1
    , contributor
    Comments (5031) | Send Message
     
    Hoang6-
    Not one analyst.

     

    Most Recent Upgrades during February to date:

     

    JPM Buy $80

     

    NEEDHAM Outperform $80

     

    GOLDMAN SACHS Buy $78

     

    STIFEL Buy $82
    5 Mar 2014, 03:56 PM Reply Like
  • Nascar06
    , contributor
    Comment (1) | Send Message
     
    Is this going to be the next Google?
    5 Mar 2014, 04:15 PM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    It better be so you can break even if you buy it now! It's priced assuming it already is:
    Google / Facebook revenue: $55B / $7.8B = Google has 7x rev.
    Google / Facebook Net Income: $11B / $1.5B = Google has 7x profit
    Google / Facebook Enterprise Value: $255B / $163B = ...

     

    Google only has 1.56x the EV value. So if Facebook grows 600% (to 700% of where they are now), they will be as big as Google, but their Enterprise value would only grow 1.56x. And that's assuming Google isn't overpriced in this bubble! And I dont think that even includes the Whatsapp dilution! Hooray!

     

    http://yhoo.it/18tvjq2
    http://yhoo.it/QrtGPl
    5 Mar 2014, 04:40 PM Reply Like
  • 49mike
    , contributor
    Comments (7) | Send Message
     
    I'm not an analyst or a sophisticated investor, but I'm pretty sure Mark Z. isn't looking at EPS, PE or other such things when he makes his decisions...and I sure hope he continues doing whatever he needs to do to get the FB share price into the Google range in a few years.
    5 Mar 2014, 05:36 PM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    Hi Mike, as new investors are often confused by share price I'm going to give a 2 second tutorial. If you already knew this, please dont be insulted.

     

    The per share price of a stock has nothing to do with the total value of the company in any way. It is pretty close to random since it all depends on the number of shares that exist for that particular company. That's why people often talk in terms of ratios like Price to earnings so that you can compare 2 companies in a meaningful way.

     

    It is the difference between saying "I have 10 bottles of soda" and "I have 10 liters of soda". The first tells you nothing about how much soda you have because you dont know how big the bottles are. The second tells you how much you have, but doesnt get into the specifics of how it is contained. Only with the two statements can you deduce that you have ten 1-liter bottles.

     

    I hope that helps, again apologies if you already knew that, no insult intended. There are a lot of people invested in Facebook in which this is their first real foray into the market.
    5 Mar 2014, 06:01 PM Reply Like
  • 22643611
    , contributor
    Comments (2099) | Send Message
     
    @49mike, keep in mind the tutorial you received is from someone short FB from $35.

     

    Take it however you like and good luck.
    5 Mar 2014, 06:14 PM Reply Like
  • 49mike
    , contributor
    Comments (7) | Send Message
     
    Hi Monfrere...I appreciate your reply and I'm not insulted whatsoever, even though I know a fair amount about investing and completely understand what you are saying. Although I'm not a professional analyst or investor, I've been very successful in my profession, business, am currently president of one Canadian company, VP of another and have done well as an investor and trader (when I have the time) over the past 30 years.

     

    I don't mean to criticize anyone's analyses...I don't believe I have the expertise to do that..and most of what I read seems right on, from the analyst's point of view.

     

    What I just meant to say is that Mark Z. is probably not looking at the world the way an analyst would. I think he's on another mission completely when he makes his decisions...he believes he can connect people around the world through FB, Instagram, WhatsApp and who knows what will come next. To me, that's why share prices are going up...people are buying in to his mission and his belief...even when the financial analyses are saying the shares are perhaps overpriced. I equate what's going on with FB shares more with Simon Sinek's philosophy as explained in his book "Start with Why", than financial analysis of the company itself.

     

    Hi 22643611,...I bought FB at $35, so I'm enjoying the ride and hope it continues...and doing some day trading with it along the way :-)
    5 Mar 2014, 09:09 PM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    Good boy 226! Now go to my profile and click on all my other comments and type that again! Woof!
    6 Mar 2014, 08:34 AM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    Congrats 49mike, seems like you are on the right side of history. Eventually Zuckerberg's mission will need to turn into profits since this is a publicly traded firm and not a not-for-profit. That said, sometimes the mission is able to create profits and since he's already proven that he can take something as silly as Facebook and turn it into a multi-billion dollar company, perhaps he has another trick up his sleeve. I just wish he'd share with us how the mission converts into dollars.

     

    As for 226, he wasnt really talking to you. that's just my lapdog / mascot. he follows me around and tells everyone how awesome I am by trying to deride me. It's like Coke and Pepsi, where Coke gets a lot of value by Pepsi trying to make it a two dog race. Unfortunately in this case it's Coke and RC cola. Wanna see him do a trick? 226, jump boy! Jump!
    6 Mar 2014, 08:40 AM Reply Like
  • Tradevestor
    , contributor
    Comments (5012) | Send Message
     
    The risk reward do not look enticing here for Facebook

     

    http://seekingalpha.co...
    5 Mar 2014, 06:52 PM Reply Like
  • howieLONG
    , contributor
    Comments (42) | Send Message
     
    Monfrere, you are being far too rational here.
    5 Mar 2014, 08:45 PM Reply Like
  • BAHAMAS1
    , contributor
    Comments (5031) | Send Message
     
    It must be wonderful to be more knowledgeable than the 17 major analysts who have upgraded FB since January of this year,
    Or is it just desperation as the short position(s) get more costly ?
    5 Mar 2014, 09:30 PM Reply Like
  • Earl the Squirrel
    , contributor
    Comments (22) | Send Message
     
    Monfrere makes sense. As for the notion that Zuckerburg is on a mission to connect us all, I say, "Fantastic! The lads will be over the Moon!"

     

    But the bigger, and more important, question is this: in doing so, will FB make enough money to justify its lofty valuation?

     

    I say, no way...and have purchased $60 and $65 puts accordingly (June and Jan 15 dated contracts).
    6 Mar 2014, 01:00 AM Reply Like
  • leslexus
    , contributor
    Comments (2) | Send Message
     
    I am new to investing. I started 12/17/2013 when i bought some twitter 443 shares @ 56.35 and sold 10 days later for 70.00. so i began day trading with Tesla & Twitter. In this time I have made $20,000. Now i want to find some stock that i don't have to watch daily so i bought FB, Ford, American Express, Coke & Gilead Sciences. So listening to you guys some how troubles my decision
    6 Mar 2014, 02:37 AM Reply Like
  • Jonnnyb
    , contributor
    Comments (2) | Send Message
     
    FB is going to be a $200 stock someday and anyone shorting it is a moron.
    6 Mar 2014, 02:38 AM Reply Like
  • monfrere
    , contributor
    Comments (719) | Send Message
     
    Only a $500B market cap? Cmon, I think they are easily worth $1T.
    6 Mar 2014, 08:43 AM Reply Like
  • Earl the Squirrel
    , contributor
    Comments (22) | Send Message
     
    Ha! The madness of crowds...class action attorneys have got to be licking their chops at the fraud FB has perpetrated.
    6 Mar 2014, 09:04 PM Reply Like
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