Facebook's recent mobile ad performance shows that the social media giant has more growth potential, Mark Mahaney of RBC Capital Markets said Wednesday.
"We think this is kind of a small 'buy' here," he said.
Mahaney added that he believed fair value for the stock was in the $31 to $32 range, giving the shares a valuation of 40 times next year's earnings estimates.
"Google at its peak traded there," he said. "We think the stock could go there."
Mahaney's comments came as a 13F filing by Leon Cooperman's Omega Advisors showed that the legendary hedge fund manager had liquidated his Apple holdings and purchased 3.16 million shares of Facebook.
(Read More: Leon Cooperman Sells Apple Stake, Buys Facebook)
Facebook stock closed at $27.90 per share, up 1.9 percent.
On "Fast Money," Mahaney identified the element of Facebook's quarterly earnings report that made him hopeful.
"I think the most important read from the quarter is – from the last two or three quarters is – wait a minute, they went from zero percent of their revenue being mobile to 25 percent of their revenue being mobile in about three quarters, six to nine months, and it didn't impact their user growth or their user engagement," he said.
The uncertainty of how users would react was significant, Mahaney added.
"That was a very legitimate fear," he said. "Who knew what was going to happen to the Facebook's user base when all of a sudden on their ad-free mobile devices they now all of a sudden had Facebook ads? But now they've got them, they seem to be comfortable with them, and it tells you going forward that Facebook can probably implement other ad formats on those mobile devices, and it can still grow."
Trader disclosure: On Feb. 13, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long BLK; (as of 2/12) Karen Finerman is long AAPL; Karen Finerman is long AAPL PUT SPREADS; Karen Finerman is long AAPL CALL SPREADS; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long XLF; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is short SPY; Karen Finerman is short IWM; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Grasso is long AAPL; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long GOOG; Steve Grasso is long GDX; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is funds long HAIN; Steve Grasso is funds long HPQ; Steve Grasso is funds long MU; Steve Grasso is funds long NEM; Steve Grasso is funds long ZNGA; Steve Grasso is funds long GNC;
For Mark Mahaney
A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for eBay, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for Trulia, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for Facebook, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from eBay, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from Facebook, Inc. in the past 12 months. A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from Trulia, Inc. in the past 12 months.