A major catalyst in the ratings upgrade is the company's likely inclusion in the S&P 500. Stifel analysts note that "Facebook has been publicly traded for a little over a year now and with a market cap of nearly 60 billion, it is likely to be considered for inclusion in the S&P 500 in the next year."
The 9-year-old company would be right at home, as it would join other Internet giants such as Amazon (AMZN), Yahoo (YHOO), and eBay (EBAY). If included, Facebook would be the 59th largest company on the S&P index.
Analysts are also optimistic about Facebook's likely success in the online advertising space. According to analysts at JP Morgan, "Branded ad dollars continue to shift online and to social as advertisers and marketers allocate more of their annual spend to online channels. We believe this shift provides a tailwind to Facebook, as we consider Facebook to be one of the primary beneficiaries of increasing social ad budgets." Satisfying marketers is crucial for Facebook, as the company is expected to post over $5.8 billion in ad revenue alone by the end of the 2013 fiscal year.Noting this importance, Facebook is giving their advertising platform a facelift. Moving forward, companies will find advertising easier and more efficient. Facebook will do this through replacing quantity with quality. Zuckerberg's powerhouse believes that through reducing the number of ads while streamlining their design, marketers will see better results. Moreover, video and mobile advertisements could add new spheres of ad revenue. There is also optimism surrounding the trendy Facebook subsidiary, Instagram. Although this small social media service is not currently a significant revenue source, it is rising quickly. Jordan Rohan of Stifel notes, "It is estimated that there will be over 4 billion mobile phones worldwide by 2017, most of which will have a camera, and thus, any monetization of the platform will result in significant revenue to Facebook in the long-term."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV