Hillside Partners analyst Rory Maher just initiated Facebook coverage at a $90 billion target valuation.
In a note, he gave four reasons why:
- “Facebook’s strategy of “taxation for socialisation” is disrupting markets we estimate at over $11 Trillion, enabling it to grow into a very big business by capturing only a small per cent of market share.”
- “We spoke with advertisers that manage over $30 Billion in advertising spend and see strong, pent up demand with limited supply.”
- “Despite already strong engagement we expect users to spend an increasing amount of their time on Facebook enabling it to launch new ad products and grow other business lines like Credits and Retail.”
- “We estimate Facebook should grow revenue 30%-plus annually through 2015 with EBITDA and FCF margins approaching 40% and 20%,respectively.”
Maher also covers Google and a bunch of small caps. More info here (.PDF) >>