Needham Reiterates Buy, $40 PT on Facebook

Needham maintained its Buy rating and $40 price target on Facebook (NASDAQ: FB) as it sees mobile growth as a valuation positive at this point.

Needham noted, "Mobile usage growth is a headwind to payments revenue growth (16% of FB's total revenue) because mobile games have lower payments (vs desktop) because FB doesn't yet process mobile payments. … Because we believe that mobile monetization will be robust over time, we would suggest that FB's rapid mobile growth should be viewed as a valuation positive, contrary to the consensus view."

Facebook closed at $26.84 on Thursday.

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