Tigress Financial Partners Upgrades Facebook (FB) to Buy

Tigress Financial Partners upgraded Facebook (NASDAQ: FB) from Neutral to Buy. Analyst Ivan Feinseth noted impressive Q3 results. He also has growing confidence in Instagram and WhatsApp monetization, and he thinks fears about teens and millennials leaving are dramatically overblown.

"Facebook delivered impressive 3Q results; total revenue and mobile advertising sales grew 59% to $3.2 billion and 121% to $1.9 billion Y/Y respectively. A re-acceleration of user engagement metrics is strengthening our confidence that FB will continue to deliver increasing shareholder returns. Facebook’s key performance indicators are in the top decile across our universe of 2,200 stocks; economic profit grew over 200% to $2.3 billion in the last twelve months driving EP momentum margin to 23.2%, substantially higher than its peers group and placing it in the top 1% of our universe. We see FB’s indication of 2015 as an “investment year” as a key driver for future return on capital in the next twelve months and see their economic return spread increasing to nearly 20%," said Feinseth.

"We believe the strong user metrics the company reported, notably the DAU/MAU reaching an all-time high of 64%, should diminish any fears about whether or not teens are using the platform. We see increasing engagement from baby boomers and older generations of users and believe these demographics underappreciated given their greater discretionary income than younger generations. Furthermore, we believe teens and millennials are gravitating more towards Instagram offsetting any attrition from Facebook," he added.

For an analyst ratings summary and ratings history on Facebook click here. For more ratings news on Facebook click here.

Shares of Facebook closed at $74.11 yesterday.

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