NEW YORK (TheStreet) -- Shares of Facebook (FB) are slightly down 0.09% to $78.33 in pre-market trading Friday, after the social media giant had its price target raised to $91 from $86 by analysts at Citigroup this morning.
Analysts at the firm maintained its "buy" rating, on the heels of Facebook-owned Instagram's announcement that it reached more than 300 million users.
Citigroup upped its valuation of photo-sharing service Instagram to $35 billion from its previous estimate of $19 billion, citing faster audience growth and continued monetization gains by social media properties.
Analysts at the firm noted, "We expect that 2015 will mark the first year that Facebook begins to develop more meaningful off-Facebook revenue streams."
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."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FB's very impressive revenue growth greatly exceeded the industry average of 28.6%. Since the same quarter one year prior, revenues leaped by 59.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FB's debt-to-equity ratio is very low at 0.01 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 12.65, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 76.47% and other important driving factors, this stock has surged by 57.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Internet Software & Services industry and the overall market, FACEBOOK INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: FB Ratings Report