Facebook Inc(NASDAQ:FB), the social networking giant laid to rest fears that the company was losing its way among the proliferation of mobile devices and more users shifting to that platform.
The company showed that it is capable of generating money from mobile ads with a solid set of number for the third quarter, which saw its mobile advertising revenues surge.
Shares in the company rocketed 19 percent to close at $23.23 on Wednesday, a day after it reported a huge revenue growth.
Ad revenues also soared, with 14% of the total coming from mobile.
Analysts lost no time in upgrading the stock, which has been battered mercilessly in the past few weeks and months. The stock had depreciated by more than half from its IPO price of $38 a share in May.
Citigroup and Bank of America/Merrill Lynch upgraded the stock from neutral to buy ratings, citing improvements in the company’s fundamental business.
“What investors have for the first time since the Facebook IPO is fundamentals acceleration WITH a reasonable valuation,” wrote Mark Mahaney of Citigroup.
In the July quarter slowing revenue growth and very little efforts at monetisation of the company's revenue base had led to concerns that the company may be a poplar platform for people but was not good at generating revenues.
The biggest relief among analysts is that the company has successfully managed to transition from desktop devices to mobiles.
Facebook beat Wall Street forecasts for the third quarter, posting a stronger-than-expected gain in advertising revenue.