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NEW YORK (TheStreet) -- Facebook (FB) - Get Free Report shares tanked today after the world's largest social-networking company said revenue growth slowed in the second quarter and didn't give much of an outlook for the rest of the year.

Plenty of analysts, though, remain bullish on the company.

"Lack of forward guidance put pressure on shares," Sterne Agee analyst Arvind Bhatia said in a note. "However, we think Facebook's market opportunity remains large and the stock should be a core holding in tech portfolios with a long-term horizon."

Bhatia lowered his price target from $46 to $37 (the stock today is around $24), warning the shares could remain volatile quarter-to-quarter, but reiterated his "buy" rating. Increasing adoption of Facebook's Premium Ads and Sponsored Stories should significantly improve the company's monetization, he wrote.

"Premium Ads and Sponsored Stories generate five to 10 times the engagement and three times the return on investment compared to other ads, according to Facebook," he added. "We think this could create upside potential for results in

the second half of 2012 and beyond."

Sponsored Stories, which let advertisers take word-of-mouth recommendations and promote them in users' News Feeds, have grown massively and demonstrated early success, according to CEO Mark Zuckerberg.

"By the end of June, Sponsored Stories in News Feed was at a run rate of over $1 million per day in revenue and about half of that is coming from mobile," he said during the company's second-quarter conference call. "This is an encouraging start in our effort to generate revenue from the mobile use of Facebook."

The company's ability to quickly monetize mobile is a key issue for investors, particularly set aginst the backdrop of slowing revenue growth.

Facebook reported sales of $1.184 billion, up from $895 million in the prior year's quarter, and just above analysts' view of $1.146 billion. Excluding items, the Menlo Park, Calif.-based firm earned 12 cents a share, in line with Wall Street's expectations.

The company's decelerating revenue growth, however, is an issue. Facebook raised revenue by 32%, slowing from 45% in the first quarter and 55% in the fourth quarter.

Oppenheimer and Co. analyst Jason Helfstein acknowledged the deceleration and lack of guidance in a note released today, but said that "Zuckerberg's participation in the conference call was a shareholder-friendly gesture," he said, citing the Sponsored Stories run rate as a key takeaway. Helfstein also pointed to Facebook's prediction that 4 billion to 5 billion people will have smartphones in the next five years as evidence of its huge mobile opportunity.

The analyst rates Facebook "outperform."

Prior to the results, there were also concerns that Wednesday's weak

second-quarter number



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would hurt Facebook. The online gamer, a key Facebook partner, cut its full-year earnings guidance, citing "a more challenging environment on the Facebook Web platform."


(JPM) - Get Free Report

analyst Doug Anmuth, however, notes that this did not materialize.

"Results were better than feared, particularly after Zynga's weak performance a day earlier," he said in a note. "Importantly, we believe the company provided good detail on early traction of its new ad formats and initiatives, and we continue to expect revenue re-acceleration in the back half of 2012 and into 2013."

Anmuth rates Facebook "overweight."

Facebook is also edging closer to a billion monthly users. The company had 955 million monthly active users as of June 30, and averaged 552 million daily active users last month.

Still, Facebook shares were off 9.4% at $24.33 in early afternoon trading today. The company's stock has now plunged almost 36% since its IPO in May.

--Written by James Rogers in New York.

Follow @jamesjrogers

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