This Is The Peak For Facebook, Says Chowdhry

Shares of Facebook Inc FB were trading higher by more than 1 percent at $135.00 ahead of Thursday's market open. While it opened at $133.18 and began falling, it's likely to trade above its current 52-week high of $133.50 sooner rather than later.

Trip Chowdhry of Global Equities Research is encouraging Facebook investors to start cashing in their profits and "lighten up on strength."

In a research report following Facebook's fourth-quarter results, the analyst argued that this is the "peak" of Facebook's stock for two notable reasons: 1) the social media industry is a zero sum-economics as well as in zero-sum-time spent, and 2) advertisers budgets aren't being consolidated but are being spread out across all the platforms.

Chowdhry's valuation matrix and working financial model of Facebook yields a price target of $115.

Winner Doesn't Take All

Chowdhry also highlighted what he said about the entire social media space in a note Monday.

The analyst argued at that time that the social media sector is at the "tail end" of the boom and "novelty is giving way to fatigue." He also noted that a typical social media user has more than 20 different mobile apps all of which are supported for ads. As such, whoever emerges as the winner, be it Facebook or someone else, "does not take it all."