Is Facebook’s Stock a Better Long term bet Right Now? (NASDAQ:FB)

Facebook’s (NASDAQ:FB) shares have surged by 450% since its public debut in 2012 thanks to massive additions of active subscribers globally as well as dominance in online advertising.

However, Facebook has been facing troubles with certain well-documented woes over the past few years – from media back lashing over improper access of information of users by political consulting firms in 2016 to politicians criticizing the company for the type of campaign advertisements being allowed over the social platform more recently.

Will It Be Worth An Investment?

There have been talks going around that the US antitrust investigators might end up breaking up the company. The company has been able to brave the criticisms and is now laying down the groundwork for more diversified services to be provided through its various social apps.

In 2019, Facebook accounted for a user count of 2.50 billion, along with revenue of $71 billion. But, the user growth rate has slowed down and would continue to do so over the next decade. Facebook has now shifted to Average Revenue Per User (ARPU) for further growth, which has increased from 2012’s Q4 figure of $1.54 to $8.52 in 2019 Q4.

This is due to the company’s strategy towards better delivery of ads and providing a lucrative platform to the advertising partners. The company’s other segment, Oculus virtual reality, has also been growing steadily, bringing in revenue of $1 billion in 2019.

Ads bring in the majority of revenue for Facebook. But, the company is not relying solely on ARPU and is looking for diversification. The company has already undertaken work in order to diversify the platform, much of which is currently focused on helping users control privacy.

The company spent $46.8 billion in 2019 on privacy updates and regulatory compliance. The company is also working on various other features, one of which is WhatsApp Payments – rolling out in 2020 in new countries. There are also new tools available for small businesses to sell and accept payments online along with new messaging tools for communication among employees and with customers.

Considering the dominance of Facebook in the advertisement space along with the efforts towards cloud-based tools for its users, Facebook has a bright future ahead.

About Travis Garlick 1791 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.