Only Up From Here for This World-Class Internet Stock?

World-Class Internet StockWhat began as a relatively simple idea for communicating across computers or mobile devices has, in little more than a decade, become an iconic American symbol in social media.

Of course, I’m talking about Mark Zuckerberg’s start-up Facebook, Inc. (NASDAQ/FB), which traded at a new record-high of more than $81.00 on Tuesday morning, equating to a colossal market value of $210 billion. (Amazing what can come from the dorms of Harvard.)

Facebook is now arguably the top social media stock in the world with its more than one billion users, based on my stock analysis. A pretty big feat, though the company still hasn’t been able to crack into the highly regulated Chinese market.

As my stock analysis might suggest, getting its foot into China and India could generate even more staggering growth metrics for a company that is already beginning to deliver results by monetizing its user base.

For all those who thought Facebook was just another overhyped company with very little substance, they have so far been proven wrong.

Luckily, I was not one of those bears, as I couldn’t ignore the one billion pairs of eyes, especially if the company evolved and began to make money from its user base.

While the social media space is highly competitive with the likes of chief rival Twitter, Inc. (NASDAQ/TWTR), my stock analysis indicates that Facebook currently has the upper hand as the early entrant.

Facebook Inc Chart

Chart courtesy of www.StockCharts.com

Of course, the proof is in the financials, as my stock analysis suggests. How about revenue growth of 55% to $7.87 billion in 2013? More importantly, how about the superlative growth in mobile advertising? According to my stock analysis, this is the area that will be key for social media companies going forward.

For Facebook, the third quarter was impressive, with revenues coming in at $3.20 billion, up 59% year-over-year and beating the consensus $3.12 billion, according to Thomson Financial.

Facebook reported that revenues from the key mobile advertising area accounted for 66% of the total $2.96 billion from advertising in the third quarter. More importantly, the percentage jumped from 49% in the year-ago third quarter.

In September, there were 864 million daily active users, up 19% year-over-year. On a monthly basis, the average number of active users was 1.35 billion, with the mobile portion at a staggering 1.12 billion, up 29% year-over-year.

The only concern from Wall Street was that the fourth-quarter revenues could be below consensus, as the company ramps up its expenses to drive new applications and growth.

As my stock analysis indicates, the rise in spending is necessary for a growth stock like Facebook, as it expands its clout in the social media space.

I would be looking at weakness in a social media stock like Facebook as a buying opportunity to acquire a world-class social media company that appears to be executing with precision, as my stock analysis shows.