Bank Of America: Instagram + WhatsApp = Enormous Opportunity For Facebook

In a recent report, analysts at Bank of America explained their bull case for Facebook Inc FB. Analysts see the combination of Instagram and WhatsApp leading the stock higher.

Instagram Was 'A Steal'

Instagram now has 300 million monthly active users (MAUs), up from only 27 million in April 2012. The popularity of Instagram has exceeded the expectations of analysts, and the report includes some impressive statistics.

Related Link: Facebook's Social Media Empire By The Numbers

Over 70 million photos are shared on the site every day, and users dish out more than 2.5 billion daily "likes." In addition, users spend more than 20 minutes per day on Instagram, a statistic which analysts see as a key driver of advertising growth.

Based on comparisons to Facebook and Twitter Inc TWTR, analyst see the potential for $4 billion in revenue and a $37 billion valuation for Instagram.

WhatsApp Adds Big Value

The report also includes a breakdown of WhatsApp statistics and valuation projections.

WhatsApp's 700 million monthly active users generate about 30 billion messages per day. Analysts predict about $5 in annual revenue from each WhatsApp user, which means WhatsApp could generate around $4 billion in revenue for Facebook.

Analysts estimate WhatsApp's current value at $13-$32 billion.

Outlook For Facebook Stock

Analysts made several adjustments to their Facebook forecast based on the addition of Instagram and WhatsApp.

Bank of America has a Buy rating on Facebook and a $92.00 target for the stock.

"While our valuations may be on the more bullish side," analysts write, "we see opportunity for FB multiple expansion as these assets begin to monetize (even at lower valuations)."