NEW YORK (TheStreet) -- Shares of Facebook (FB) continue to climb, up 2.68% to $78.22, after analysts said its photo and video sharing social platform Instagram could grow to one-third the size of Facebook in two years.
"Instagram reported passing 300 million monthly active users (MAU) approximately nine months after reporting 200 million MAUs, as the platform continues to benefit from its tie-in with Facebook" Topeka Capital analysts said after Instagram announced a user milestone yesterday.
"Instagram is now one-fifth the size of FB but could reach 500M users in two years to reach one-third the size of Facebook. At that level, the monetization and valuation implications are significant," they said, maintaining their "buy" rating and $96 price target on the stock.
Instagram was acquired by Facebook for approximately $1 billion in 2012.
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 stock itself is trading at a premium valuation."