Tech

The one number you need from Facebook's earnings

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Facebook's growth far from slowing: Pro
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Facebook's growth far from slowing: Pro

Facebook just broke a record — and it has some Wall Street analysts calling for the stock to go even higher.

In Wednesday night's earnings announcement, the social media company beat estimates on both earnings and revenue. But the headline number for Wall Street was the advertising growth, higher than investors have see in two years, Mark Mahaney, RBC Capital Markets lead Internet analyst, told CNBC's "Squawk on the Street" Thursday.

"There's one number you need to know about the Facebook print last night: It's 66 percent," Mahaney said. "That was the advertising growth, year over year, if you take out foreign exchange. And that was EBITDA margin that the company printed."

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Shares soared over 15 percent mid-day Thursday on what Mahaney called a "breakout quarter" for both Facebook's core, namesake business, and the increased monetization of picture platform Instagram.

"Facebook is really in the sweet spot here in terms of the market, if you think about really where they are with secular growth and the shift to mobile," Doug Anmuth, JPMorgan Internet analyst, told CNBC's "Closing Bell."

But as Instagram comes front and center for investors, it creates a problem: There isn't enough information out there about how to value it separately from the core business, said Jason Helfstein, Oppenheimer & Co. Internet analyst.

"You could make an argument that there's a very high overlap between Instagram users and Facebook users," Helfstein told CNBC's "Squawk Alley" Thursday.

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"We run the risk of double counting," he added.

Another buzzword that caught the Street's ear? Video, said Mahaney.

"A hundred million video views a day on Facebook — I mean, with that ... advertising that is so strongly entrenched on the TV channels today, part of that's got to be coming over to Facebook," Mahaney said.

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Facebook, including Instagram, could go from 11 percent share in the global digital advertising market in 2015 to over 27 percent by 2021, according to John Blackledge, Cowen & Co. senior research analyst.

To be sure, core Newsfeed is still really what's driving Facebook's growth as it improves targeting technology, Anmuth said. But messaging and virtual reality venture Oculus will draw more attention over the next 12 to 18 months, Anmuth said.

Up next for Facebook? Showing the same transformation in messaging app WhatsApp that they showed in Instagram.

"Investors will want to see something from WhatsApp sooner rather than later," Blackledge said.

Disclosure: RBC Capital Markets is providing Facebook with non-securities services. Oppenheimer & Co. makes a market in securities of Facebook. JPMorgan makes the market in and or has a more than 1 percent share in Facebook, Amazon or Netflix.