Is it time to 'friend' Facebook?

We hated it when it IPO'd at $38 a year ago, but a year later trading near $24, we're going to friend Facebook (FB), and have added it to our Recommended List.

After a good quarter, Facebook has been under pressure due to concerns over user engagement, especially among teens and 20 somethings.

Despite chatter about Facebook losing it's popularity, statistics provided by the company and third-party data providers show that Facebook engagement remains high and is growing in many markets.

ComScore published that 23% of all time spent on Apps in the U.S. is on Facebook, and another 3% on Instagram (owned by Facebook), which equals 25%+ market share. Further, mobile users spend 80% more time on Facebook via mobile than the desktop.

Meanwhile, on the advertising front, from surveys we've gotten our hands on, most will admit that Facebook's platform is not perfect, but it is getting a lot better and they generally plan to direct more of their ad dollars towards the platform.

More importantly, the company has a lot of monetization tools in its tool belt, something that wasn't apparent when the stock IPO'd a year ago.

Since its IPO, new monetization efforts include newsfeed ads (ads directly intergrated into the newsfeed); ad exchange (real-time, bid-based system); custom audiences (which allows marketers to "merge" their customer/prospect databases with Facebook's database); special offers; app downloads; and partner categories. That's a lot of innovation in a year's time.

From a valuation perspective, the company is trading at an EV/EBITDA multiple of just over 11x based on 2014 estimates, which is cheaper than its Internet content peers, despite growing revenue at a faster clip.

Thus, we think the recent sell-off represents a good opportunity to buy a stock trading at below peer multiple that has a lot of growth levers to pull. We rate the stock a "Buy" with a $32 target. It will have a "high" risk ranking.