SunTrust Robinson Humphrey sees several benefits of the product for Facebook, maintaining its "buy" rating and $90 price target on the stock.
"While the new payments feature that is only in Messenger is 'free' (will not be monetized for P2P transactions), we believe the long anticipated feature (after the hiring of former PayPal President David Marcus) could have a large impact on the company in the future," analysts said.
Analysts specifically see five reasons why the feature could have an impact, saying it could: enable FB powered in-ad "buy-button" now that it would have a user's payment information, close the loop for advertisers and merchants, by seeing purchases, leverage massive adoption to offer a monetizable product for offline merchants, drive deeper engagement on the FB platform, and replicate the platform for the WhatsApp user base.
Separately, Nomura raised its price target to $96 from $90 yesterday.
"We have improved our Facebook revenue model to quantify the potential contribution from video ads to Facebook's aggregate price per ad and overall results. We find that video ads have the potential to drive $3.8 billion or 13.9% of 2017 estimated advertising revenue, with only modest cannibalization of other ad revenue sources," Nomura said, according to Barron's.
On another note, Indian authorities are increasingly asking for data on Facebook users, and Facebook is increasingly blocking content in the country, the Wall Street Journal reports.
That's according to the U.S. social media company's most recent report on government requests, which showed that from July to December 2014, authorities made 5,473 requests for data on users' accounts, up from 4559 requests in the first six months of that year, the Journal noted. Facebook provided "some data" in response to nearly 45% of those requests, the company reportedly said.
Facebook is a social networking website company. Facebook's websites and mobile applications enable customers to stay connected with their friends and family.
Insight from TheStreet's Research Team:
Facebook is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. After the announcement of the payment service yesterday, Jim Cramer, Portfolio Manager and Jack Mohr, Director of Research - Action Alerts PLUS issued an alert.
Here's what they had to say:
...Facebook announced it is adding a new feature in Messenger that gives people a "more convenient and secure way" to send or receive money between friends. The company said it will be rolling out the feature over the coming months in the U.S. and indicated the service will be free.
We believe this is a great move for Facebook, whether or not it is a direct revenue generator for the company (it looks like it will not be, at least initially). International money transfer is a $500 billion market (in annual revenue), with $3 trillion exchanged daily across the globe. The demand for such a service, especially within an already established network of 1.4 billion users, is real, and we are glad to see Facebook not only leveraging its ecosystem but deepening it even further.
We expect that the move will go a long way in further strengthening Facebook's user engagement, which is already the highest across any site or social network. In fact, we learned this morning that Facebook's share of mobile minutes accelerated to 22% in February, well above its peers at 5%. Its share of total Internet minutes across both mobile and desktop stands at 18% and is over 5x the minutes spent on Twitter (TWTR) - Get Report and Snapchat.
If you've ever watched 'Mad Money' you would know how much we like the global payment space, so it is only fitting that one of our favorite investments is now positioning itself to be a major player.
Want more information like this from Jim Cramer and Jack Mohr BEFORE your stock moves? Learn more about ActionAlertsPLUS.com now.
Separately, TheStreet Ratings team rates FACEBOOK INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing." You can view the full analysis from the report here: FB Ratings Report