Despite the hit Facebook shares took earlier in the week and several studies suggesting social media ads might have a poor return on investment, many analysts remain extremely bullish on the stock.
"It's had an incredible run during the last year, and I think there is still a tremendous amount of upside left in the stock," said Victor Anthony, an analyst at Topeka Capital.
The company's shares closed down more than 3 percent on Tuesday (before rebounding Wednesday), but its stock price is still up over 160 percent year over year. And that upward trend will likely continue because the company's core marketing business keeps growing, industry experts said.
"Large brands are giving Facebook more money every day," said Ron Josey, an Internet analyst at JMP Securities. "Their core business is still very, very strong."
How strong? Another new report gives some pretty impressive figures.
Facebook's average price of ads sold on a cost per 1,000 impressions (CPM) basis is at $1.95, an increase of 218 percent from a year ago and the cost per click (CPC) for both desktop and mobile ads is up 29 percent year over year, according to a report published Tuesday by Facebook's ad partner Nanigans.
Nanigans also reported that its clients saw a 146 percent increase in ad click rates from a year ago, meaning more people are clicking on displayed ads.
Those stats run contrary to a recent Gallup report that found social media marketing does not affect the majority of Americans' purchasing decisions.
"When I speak to advertisers and preferred marketing directors, their story is completely different," Anthony said.
Anthony, who has a buy rating on the stock with a price target of $80, said that marketers are increasing their budgets for the platform—largely because of the company's 1.2 billion users.
"Facebook is so entrenched in people's lives, it's going to be difficult for any platform to supplant that," Anthony said. "It's a utility that's part of our lives and there's no credible alternative at the moment. And as long as users continue to engage with the platform, well, the ads will go to where the users are."
Facebook is scheduled to report earnings July 23, and investors will be looking to see if its growth continues to accelerate, said Josey. who has a buy rating on the stock with a price target of $83.
"Engagement trends are strong, but I think earnings results will trump everything," Josey said. "It's rare to see a company growing this quickly, the only other company that comes to mind is Alibaba."
In fact, for the past four quarters Facebook has posted quarterly profits that topped expectations by at least 10 percent.
Besides its core advertising business, the company has also made a number of investments that should pay off in the long run, analysts said.
Facebook has spent more than $20 billion on companies since the beginning of the year, most notably its $19 billion acquisition of the messaging service WhatsApp. And while Facebook's shopping spree has some people raising their eyebrows, its purchases should actually be big growth drivers.
"We won't know the ROI of the WhatsApp deal for probably a couple years or so," SunTrust Robinson analyst Bob Peck said Tuesday on CNBC.
"Tech is riddled with companies that never made those big game-changing investments, and as long as Facebook's core business is strong, it can afford to make these big bets," Peck said.
The company will likely begin to cash in on Instagram--which it bought for $1 billion in 2012--over the next two years, Anthony said. He said he sees a gradual increase to $1 billion in revenues annually for Instagram.
Between 2016 and 2017, Anthony said, he sees the company beginning to monetize WhatsApp via user fees and Oculus Rift, which it purchased in March for $2 billion. However, it's still unclear how the company plans to make money from the virtual reality platform, he said.
Josey said he also sees Oculus as a much longer-term play, but added that in the more near term investors can expect the company to profit from its video ad business, especially when it rolls out autoplay ads.
"It's a multiyear strategy, but this company is certainly hitting its stride," Josey said.
—By CNBC's Cadie Thompson