Motley Fool...................
I believe the "wow" emoji would be apropos
Sean Williams (Facebook Inc.): It's incredible to be talking about a company with a $354 billion valuation as a growth stock, but there's seemingly nothing standing between Facebook and what's likely a $1 trillion-plus valuation over the long run.
All an investor needs to do is look at the active user statistics surrounding Facebook to get a feel for just how dominant it is. According to Facebook's fourth-quarter results, it ended 2016 with 1.86 billion monthly active users (MAUs), representing 17% year-over-year growth, with 94% of these users accessing Facebook via theif mobile device. In two years' time, Facebook added 470 million MAUs.
Comparatively, no other social-media networks are even close -- that Facebook doesn't own, that is. Facebook-owned WhatsApp, Messenger, and Instagram, boast about 1.2 billion, 1 billion, and 700 million active users, placing them in second, third, and seventh behind Facebook in terms of active users. In other words, Facebook lays claim to four of the top seven social-media networks in the world.
Facebook has also barely touched the tip of the iceberg in terms of monetizing these platforms. The vast majority of its revenue comes from ads on Facebook. It's only begun advertising on Instagram within the past couple of years, and it's not even cracked the surface on generating revenue from Messenger or WhatsApp yet. There are a seemingly endless number of revenue channels that Facebook has yet to tap.
The international market is another stomping ground for long-term growth. For instance, even though the U.S., Canada, and Europe combined for 580 million MAUs in the fourth quarter, its rest-of-world MAUs totaled 606 million. Yet the average revenue per user of rest-of-world MAUs is only $1.39 as of Q4 2016, compared with more than $19 per user in the U.S. and Canada. Foreign markets offer a potentially multi-decade growth opportunity for Facebook.
Considering that Facebook's PEG ratio is just a hair above 1.1 (which is still exceptionally cheap), I'm inclined to believe that this rapid growth stock is one you'll want to consider socking away for years, or decades, to come.
Should Facebook be on your buy list? It's on ours...
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