The largest social media platform in the world, Facebook Inc (ticker: FB), has eclipsed 2 billion monthly users for the first time. CEO Mark Zuckerberg celebrated the milestone event with a Facebook post on Tuesday, but investors are left wondering how a network more than six times the size of the entire population of the United States is going to continue to deliver growth for shareholders in the long-term.
It took Facebook less than five years to jump from 1 billion users to 2 billion users, which is exactly the kind of growth that investors appreciate. Facebook has faced a number of challenges over that time, including criticism from users and the media about proliferating the spread of “fake news,” utilizing algorithms that create political and social echo chambers for users and allowing offensive and illegal content to be streamed on its Facebook Live platform.
“We feel like our responsibility is expanding, especially around passing this milestone of 2 billion people in the community,” Zuckerberg said in an interview earlier this month.”We’ve been thinking about what our responsibility is in the world and what we need to do.”
So far, Facebook’s size hasn’t hampered its ability to deliver impressive growth and returns for its shareholders. In the most recent quarter, Facebook reported a 17 percent year-over-year increase in monthly users. FB stock has soared 359 percent in the past five years.
Facebook has been one of a handful of tech stocks that have led the market higher during the eight-year bull market since the 2008-2009 recession. However, these stocks hit a bump in the road earlier this month when Goldman Sachs analyst Robert Boroujerdi said Facebook, Amazon.com, Inc. (AMZN), Apple (AAPL), Microsoft Corp. (MSFT) and Alphabet (GOOG, GOOGL) have created a “valuation air pocket” in the stock market.
The warning initially rattled investors, but Goldman analyst David Kostin said on Wednesday that Facebook has the best revenue growth prospects of any of the so-called FAAMG stocks over the next couple of years. Goldman projects impressive 39 percent full-year revenue growth from Facebook in 2017 and 30 percent growth in 2018.
FB stock has been…
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