3 Reasons Victor Anthony Sees Facebook As A Buy

Despite anticipated risks of a SnapChat IPO and potential regulations imposed by the Trump administration, Aegis Capital initiated Facebook Inc FB as a Buy with a $150 price target for 2017.

Rise Of Instagram

Analyst Victor Anthony foresees a growing opportunity for the parent company of Instagram, which expanded last year to include features similar to competitor SnapChat.

The photo app, which presently entertains 600 million users, 1.5 million business profiles, and 500,000 advertisers, secured about $1.8 billion in revenue in 2016. Anthony expects that sum to double in 2017.

According to Aegis Capital estimates, Instagram contributed to about 8 percent of Facebook's advertising revenue growth in 2016 and is expected to contribute an additional 4.5 percent in 2017.

Advent Of Messaging Monetization

Corporate recently expanded the capabilities of Messenger and Whatsapp to allow users to accept payments, confirm reservations and engage in other business transactions.

The natural next step in Facebook’s platform commercialization is to charge businesses for their activities — a feature Anthony expects to take effect by 2018.

With more than a billion users trafficking the communications apps, this venture is predicted to foster annual revenues of more than $2 billion.

Expansion Of Options

Apart from its widely-used social platforms, Facebook expects long-term gains from its virtual reality branch, Oculus, its still-developing Graph Search feature, and its effort to facilitate ecommerce.

Anthony also points to Facebook’s extension into China as opportunity for long-term growth.

Facebook shares rose about 2 percent to $117.25 on Tuesday.