Facebook shares hit record high of $76 after stellar Q2

Facebook's advertising revenue hit $2.68 billion, with 62% coming from mobile

It seems so long ago now that analysts were fretting and worrying over Facebook's long-term monetization, and wondering if, and how, the company would ever really make money.  Now that Facebook has figured out a sustainable revenue stream, one that is growing rapidly, the company is riding higher than ever.

Shares of Facebook rose to a record high of $76.74 a share on Thursday, a gain of over 7%, after posting excellent second quarter earnings on Wednesday, with big gains in advertising revenue, especially on mobile.

In the quarter, advertising revenue hit $2.68 billion, an increase of 67% from the same quarter the year before. Mobile accounted for 62% of that revenue, up from approximately 41% of advertising revenue in the second quarter of 2013. 

Those numbers, understandably, made analysts very, very happy.

"Facebook has, so far, effectively addressed one of the most significant overhangs from its IPO days - the lack of mobile monetization," RBC Capital Markets analysts said in a note.

"We think 2Q represents further validation that Facebook can continue to drive mobile ad revenue growth through better ad targeting, relevancy and quality, and through continued growth in advertiser demand in its ad auction," said JP Morgan analysts.

A slew of investors have also raised their price targets for the stock, according to Analyst Ratings Network. Many investors are now expecting the stock to reach as high as $90 a share.

Bank of America raised its target from $84 to $92, while Piper Jaffray raised its price from $76 to $90. RBC went from $86 to $90, and Oppenheimer raised from $79 to $90. 

In all, there are 43 analysts covering Facebook's stock. Of those, 37 have a "buy" or a higher rating on the stock, while the other six have "hold". Nobody is advising their clients to sell Facebook stock right now.

Facebook's market cap currently stands at $194.97 billion, compared to its IPO market cap of $81.74 billion. The company's lowest point came in August of 2012, when its market cap was $38.69 billion.

Shares have come down a bit since their peak earlier today. Facebook is now trading at $76.08 a share, up 6.72% or $4.79.

Facebook by the numbers

In the earnings report, Facebook posted revenue of $2.91 billion for the quarter, beating Wall Street's estimates of $2.81 billion, and up % from $ billion in the second quarter of 2013. Adjusted earnings per share came in at 42 cents in the quarter, higher than the 32 cents a share that analysts had been expecting.

Advertising revenue was $2.68 billion for the quarter. It increased 67% from the same quarter the year before. Mobile accounted for 62% of that revenue, up from approximately 41% of advertising revenue in the second quarter of 2013.

Revenue from payments and fees for the quarter was $234 million, a 9% increase year ro year.

GAAP net income was $791 million, a 138% increase from the $333 million for the second quarter of 2013, while non-GAAP net income for the quarter was $1.09 billion, up 124% compared to $488 million for the second quarter of 2013.

Daily active users (DAUs) were 829 million on average, an increase of 19% year-over-year, while mobile DAUs were 654 million on average, an increase of 39%.

Monthly active users (MAUs) were 1.32 billion on average, an increase of 14% year-over-year, while mobile MAUs were 1.07 billion on average, an increase of 31%.

(Image source: highscore.com)