"We think 2Q represents further validation that Facebook (FB +5.5%) can continue to drive mobile ad revenue growth through better ad targeting, relevancy and quality, and through continued growth in advertiser demand in its ad auction," writes JPMorgan, bullish as ever following Facebook's Q2 beat.
Needham estimates Facebook now "accounts for $1 of every $5 ad dollars spent on mobile devices." SunTrust observes the Q2 growth came in spite of little or no revenue from a slew of long-term initiatives, including video ads, Instagram, Buy button ads, WhatsApp/Oculus, and the mobile ad network.
Jefferies makes a similar point. It adds Facebook's "ever-deepening ties" to e-commerce leave it well-positioned to "capitalize on strong holiday shopping trends." Others are encouraged by Mark Zuckerberg's CC remarks (transcript) about future payments integration for Messenger, and his claim that the average U.S. user spends 40 minutes/day on Facebook.
Shares are making new highs, and now trade at a steep 12x 2015E sales. Revenue estimates should rise some in response to the Q2 numbers.