Shares of Facebook (FB) rallied 3% yesterday after BTIG raised its price target on the stock to a Street-high $275/share.
The firm raised estimates based on continued dominance of Instagram. BTIG also noted that ‘the shift toward more personal content on Facebook (vs. third-party publisher content) has notably improved the quality of the core Facebook experience'.
Instagram recently hit 1 billion monthly active users. The photo and video sharing app also launched a separate app IGTV to compete more directly with Google's YouTube.
Facebook will continue to face legal issues related to data privacy across many of its jurisdictions but investors are unfazed by those risks, which don't appear to be having an impact on the business, namely, engagement on the company's social media platforms.
Concerns around engagement faded after daily active users in North America grew sequentially in the first quarter after coming in flat quarter-over-quarter for the first time ever in the fourth quarter of 2017.
Facebook also handily topped first quarter estimates on the top and bottom line. The stock hit a new all-time high two weeks ago.
The social media giant has a $574 billion market value and trades at ~26x earnings estimates for the year or ~22x next year's estimates.
One would expect yet another stellar financial performance when the company announces second quarter results on Wednesday, July 25.