Are Investors Overlooking Facebook's True Potential?

Despite ongoing concerning headlines surrounding privacy, Facebook, Inc. FB remains one of the most dominant companies in terms of mobile time spent, with a user base of more than 1 billion people. 

The Analyst

BTIG's Rich Greenfield talked Facebook on "Bloomberg Technology."

The Thesis

One of the more overlooked realities is that Facebook's namesake platform boasts 1.5 billion users who log on daily, Greenfield said.

Among those users, 800 million use the Marketplace tab — which is impressive, as the analyst said he doesn't use it himself nor does he know anyone who does.

This implies Facebook is adding features in its core platform that are "not always obvious" to U.S.-based investors, but are the norm in international countries, the analyst said. For example, Marketplace is the "default way in which goods are bought and sold" in Indonesia, he said. 

Aside from Marketplace, Facebook boasts multiple businesses that are not at all monetized or are in the early stages of monetization, Greenfield said, giving Messenger, WhatsApp and video content in both Facebook and Instagram as examples. 

Will Instagram Overshadow Facebook? 

Watching TV was once was the cure for boredom, but in 2018 the dominant cure for boredom is Instagram, Greenfield said.

Time spent on the platform has "exploded," and Instagram's user base should double to 2 billion people over time, he said. 

It's likely Instagram will replace core Facebook as the biggest business in the company's portfolio within five to seven years, in the analyst's view.

Coupled with monetization initiatives in shopping and videos, the photo and video sharing platform is a "beast" and creates tremendous value for investors, Greenfield said. 

Price Action

Facebook shares were near-flat at $151.75 at the close Thursday.

Related Links:

Analysts Parse Facebook's Growth, Revenue Trends After Mixed Q3 Print

Facebook Misses Q3 Sales Estimates, But Users Continue To Grow