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.
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"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.
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"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."