The firm upped its target on the social media giant as it believes Facebook is able to post the biggest growth in its sector.
MKM Partners maintained its "buy" rating on Facebook stock.
"While the cycle of positive estimate revisions has slowed, the company continues to deliver strong results. FB's growth adjusted multiple is not aggressive at 35x next year's non-GAAP EPS while still growing revenue by over 50% on a constant currency basis," the firm said in a note.
"Our new price target...is 32x our CY17E non-GAAP EPS, in-line with our EPS growth forecast, plus $6 per share in cash. We see no reason to decrease exposure to FB or to consider the stock anything but a core holding for growth investors," MKM Partners continued.
Facebook stock is slipping by 0.61% to $106.30 in pre-market trading this morning.
Separately, TheStreet Ratings team rates FACEBOOK INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate FACEBOOK INC (FB) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 40.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FB's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 9.96, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 75.64% to $2,192.00 million when compared to the same quarter last year. In addition, FACEBOOK INC has also vastly surpassed the industry average cash flow growth rate of 3.03%.
- FACEBOOK INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FACEBOOK INC increased its bottom line by earning $1.10 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.10).
- The gross profit margin for FACEBOOK INC is currently very high, coming in at 94.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.90% trails the industry average.
- You can view the full analysis from the report here: FB
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.