Facebook's (FB) Instagram Top Social Network Among Teens (TWTR)

Facebook, Inc. (NASDAQ: FB) is sharply higher (+3.5%) Wednesday as analysts have come out to defend the name in light of the recent sell-off in the stock along with other high-growth, high-multiple Internet names. The stock also appears to be benefiting from a new Piper Jaffray's Teen Survey which showed that the company's Instagram exceeded both Twitter and Facebook as the most important social network for teens. Piper Jaffray analyst Gene Munster highlighted that Instagram finished with 30% of teens' most important social network votes compared to Twitter (NYSE: TWTR) at 27% and Facebook at 23%.

"Our core takeaway is that Facebook has shown through its Instagram purchase that it is cognizant of changing trends in social and not afraid to make aggressive moves to capitalize on changes," Munster said. "We continue to believe that new monetization from both Instagram and video throughout 2014 should offer some upside to estimates." As the wisdom of the Instagram purchase continues to become more apparent it lends credence to the recent acquisitions of WhatsApp and Oculus, he said.

Core Facebook is more of a longer-term concern, according to Munster. Only 23% of teens selected Facebook as their most important social network this Spring, versus 27% in the Fall and 33% in the Spring of 2013. "While we remain confident that Facebook is well situated for at least the next year, longer term we believe the survey data highlights the reality that interest in social platforms is fleeting and there will always be a new platform to compete for time spent on social. Just a year and a half ago 12% of teens chose Instagram as the most important
platform for them compared to 42% for Facebook, while 30% chose it in Spring 2014 vs 23% for Facebook. We believe the 10+ year sustainability of Facebook as a business may hinge more on the company's ability to make smart acquisitions than execute on its core business."

The analyst maintained an Overweight rating and $67 price target on Facebook.

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