A new study on brand values supports what Facebook Inc.’s (NASDAQ: FB) astonishingly good earnings showed. The value of its brand has moved up sharply in the past year.
Brand Finance has just published its “Global 500 2017: The Annual Report on the World’s Most Valuable Brands.” Facebook was listed as the ninth most valuable brand at $62.0 billion, just behind Wal-Mart Stores Inc. (NYSE: WMT) at $62.5 billion. The most valuable brand, according to the study, was Alphabet Inc.’s (NASDAQ: GOOGL) Google at $109.5 billion. Facebook’s brand value rose 82%, much faster than any other among the top 10 brands.
Facebook’s dominance is social media was proven once again with its fourth-quarter 2016 earnings. Its revenue rose from $5.6 billion in the year-ago period to $8.3 billion, up 53%. Net income surged 128% from $1.6 billion to $3.6 billion. At its current run rate, Facebook could be a $50 billion revenue company in 2017. The most impressive number from the earnings report may be that monthly active users worldwide reached 1.74 billion in December, up 21% from December 2015.
The wonder of Facebook is that no other social medium has come close to catching it in either user base or revenue, despite that fact that many other large companies in the sector have tried mightily. The Facebook model is clearly superior to others, and that appears very likely to be the case for the foreseeable future. Wall Street has rewarded Facebook with a market cap of $400 billion. Its current share price around $134 is near an all-time high. After it announced earnings, some analysts put price targets for the stock at above $150.
Brand Finance methodology:
Brand Finance helped to craft the internationally recognised standard on Brand Valuation. That defines a brand as “a marketing related intangible asset including, but not limited to, names, terms, signs, symbols, logos and designs, or a combination of these, intended to identify goods, services or entities, or a combination of these, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits/value.”