Facebook stock has a long way to climb due to a few factors, Colin Sebastian of R.W. Baird said Thursday.
"I think if there was any skepticism that Facebook is a legitimate ad platform, that should be put to rest – over a billion users, most of whom use the site actively on a daily basis," he said.
Shares of Facebook closed at $34.36, up 29.6 percent, a day after a better-than-expected quarter.
On CNBC's "Fast Money," Sebastian cited a "multiplier effect" of higher advertising rates and an increased number of ads for momentum.
(Read more: Facebook lacks leadership, Porter Bibb says)
"So, the combination of that and the increasing engagement from users all point in the right direction," he added.
Sebastian had an "outperform" rating on the stock and a $36 price target.
Facebook, he also said, was a long-term story.
"I think Facebook continues to invest significantly under the hood, and what we're seeing from Q2 is some of the fruits from that investment, but I think they have a long way to go," he said. "I think we're going to see new products and new initiatives.
(Read more: Facebook's strong earnings are just the start: Pro)
"Video advertising, for example, would be a catalyst for the business, and also Facebook ads starting to appear off of Facebook on the rest of the web, just like Google does. That is also a massive market opportunity for them."
Revenue growth velocity, he added, would be "quite healthy."
(Read more: Facebook surges as 'mobile first' pays off)
TheStreet's Stephanie Link said that Facebook's positive operating leverage made the difference this quarter, as well as cost management.
"I think the company has now gotten religion on the expense side. And if you believe margins can continue to trend in these positive ways, trend higher, I think earnings really have a lot more upside," she said. "I don't think you want to buy it up 25 percent today – let it settle – but I think you can be buying."
Link noted that Facebook had stood out from others in the space.
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Stephen Weiss of Short Hills Capital noted that Facebook reported 1 million advertisers.
"The knock against Facebook has been: People don't want to do this kind of branding advertising. They want the Google type of advertising, where it's an actual transaction," he said. "Facebook's numbers put that put that to shame, and I think that that's really the big change here in psychology."
— CNBC's Katie Young contributed research to this article.
Trader disclosure: On July 25, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long F; Stephanie Link is long JOY; Stephen Weiss has nothing to disclose; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long V; Josh Brown is long LGD; Jon Najarian is long AAPL; Jon Najarian is long AMZN ; Jon Najarian is long ZNGA; Jon Najarian is long VLO; Jon Najarian is long BIDU; Jon Najarian is long SINA; Jon Najarian is long OKE ; Jon Najarian is long TIBX; Jon Najarian is long PBR; Jon Najarian is long DFS; Jon Najarian is long NRG December 29; Jon Najarian is long PHM January 19-22; Colin Sebastian is long FB; Colin Sebastian is long GOOG.