FB Stock: This Catalyst Will Drive Facebook Inc (FB) Stock Higher In 2017 And Beyond

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Also, according to eMarketer research, Instagram will close 2016 with nearly 90M US users, making up nearly 15% of its total user base. To put things in perspective, FB reported an ARPU of $53.74 in US & Canada (for the last 4 quarters) and getting anywhere close to that number could also put Instagram’s US revenue at $5.3B+ in 2018, when eMarketer expects Instagram’s US userbase to swell to over 106M users. (See also: FB Stock: Don’t Sell Facebook Inc. (FB) Stock Before Reading This)

To put things into context, Wall street analysts expect Facebook Inc (NASDAQ:FB) to report revenue of $27.3B in 2016, which means Instagram could make up 7% to 12% share of the total 2016 revenue. In other words, the photo sharing platform could add 10 to 18 percentage points of YoY growth to Facebook’s overall revenue growth, which is expected to come in at 52% YoY for FY 2016. Instagram will account for a greater proportion of this growth in FY 2017 as the platform is growing revenues at a significantly faster rate than Facebook’s overall rate.

Putting It All Together

Instagram recently crossed the 600M monthly user mark. A number of wall street analysts have recently reiterated their bullish outlook on FB stock, citing strong growth at Instagram. With the photo-sharing platform increasing ad loads, a growing user base and growing number of advertisers flocking to the platform, Instagram will unlock tremendous value for Facebook shareholders over the next few years. Instagram is clearly emerging as the next major growth driver at Facebook and investors should keep a close eye on the growth of this platform. Instagram growth should offset any weakness on the core FB platform and will be the key driver of Facebook stock in 2017 and beyond.

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The article FB Stock: This Catalyst Will Drive Facebook Inc. Stock Higher In 2017 And Beyond originally appeared on amigobulls.com. Watch our analysis video on FB

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Additional Links:

(1) http://blogs.barrons.com/techtraderdaily/2016/12/19/f-a-n-g-still-has-bite-despite-stock-weakness-says-canaccord/?mod=BOLBlog&ref=il

(2) https://s21.q4cdn.com/399680738/files/doc_presentations/FB-Q316-Earnings-Slides.pdf?ref=il

(3) http://amigobulls.com/stocks-to-buy/top-tech-stocks/?ref=il&ref=im

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