If you read my work, you are well aware that Facebook Inc (NASDAQ:FB) is one of my favorite stocks in the market. Facebook stock is cheaply valued  with huge revenue growth and just as big long-term growth drivers.

But one growth driver at Facebook that I think is slightly over-hyped is the company’s VR headset, Facebook Oculus.

Facebook Oculus made headlines recently because Facebook launched Oculus TV.

At its core, Oculus TV is a VR viewing experience which allows users to watch a flurry of VR content from Netflix, Inc. (NASDAQ:NFLX), Showtime, Hulu, Facebook Watch, Red Bull TV, and others.

It’s a cool idea that could yield billions in revenue. But pipeline dreams of VR becoming Facebook’s next $20 billion-plus opportunity are just that: pipeline dreams.

I like a lot of emerging technologies. But I’m not all that crazy about VR living rooms. There is unequivocally growth potential here through individuals seeking a truly immerse viewing experience.

But for the rest of us, sticking headsets on to watch a movie or TV show seems a little over the top.

As such, I think that Facebook Oculus presents a good, but not great, opportunity for Facebook.

Here’s a deeper look.

The VR Market Is Limited

VR technologies like Oculus are cool. They are truly immersive viewing experiences that take watching television to an entirely new level.

But do most of us really need to get to that level? Or is watching TV on a super-HD flat screen TV good enough?

I think most of us would side with the latter. Despite advancements in HDTV quality over the past several years, the TV market hasn’t exactly been a growth industry.

Over the past several years, the number of TV shipments in the United States has plateaued.

To me, that means that for most consumers, the present TV they have at home is good enough. Advancements in viewing quality, at this point, are marginal and not worth the hefty prices.

For what its worth, we are seeing a similar dynamic play out in the smartphone market.

That isn’t a good set up for VR technologies like Facebook Oculus. Consumers are by-and-large satisfied with their current TVs.

They aren’t necessarily craving a new, more immersive viewing experience.

Meanwhile, VR headsets like Facebook Oculus kind of defeat the purpose of group viewing. Family movie night is the whole family sitting down, and sharing laughs, snacks, and conversation throughout the movie.

The same goes for watching a sports game with the guys, or watching your favorite TV show with the girls.

In other words, VR headsets offer a unique experience, but that experience doesn’t really build on the inherently social experience that presently constitutes media consumption.

That could prove ultimately problematic for VR tech as it attempts to go mainstream.

Facebook Oculus Is a Billion Dollar Opportunity

Although the VR market is limited in size, that doesn’t mean that Facebook Oculus will go nowhere. Indeed, I still think Oculus is a billion dollar opportunity for Facebook.

The VR market in the United States is expected to grow from 22 million monthly users last year to 49 million by 2019. That is a fairly robust 50% compounded annual growth rate over the next two years.

Assuming growth slows to about 25% per year over the next 5 years, then you are looking at a U.S. market of 67 million users in 5 years.

Market share figures are tough to peg in the VR market, but according to a Steam survey, Facebook Oculus presently represents about 50% of the VR market.

Competition will likely drag that down to 40% over the next five years, but that still represents about 27 million active Oculus users in five years.

That is 27 million people who paid nearly $400 for an Oculus headset. It is also 27 million people who are presumably actively immersed in the Oculus TV viewing experience, which means more ad dollars for Facebook.

Overall, it is easy see how Oculus presents a billion dollar opportunity for Facebook, even though overall VR market growth is limited.

Bottom Line on Facebook Stock

Facebook stock is still the best big growth stock to own here and now due to huge growth drivers converging on a discounted valuation.

Oculus is one of the those huge growth drivers, and as such, is yet another reason to buy Facebook stock.

As of this writing, Luke Lango was long FB.