Facebook (NASDAQ:FB) stock has been beaten and bruised because investors believe that engagement on its core platform is falling. Bears think that falling engagement on the Facebook app will lead to lower monetization rates, and that the combination of fewer users and lower monetization rates will lead to drops in the company’s revenue and profits. Because of those fears, Facebook stock trades at just 20 times its forward earnings, despite the fact that its second quarter revenue jumped 42% year-over-year.

Those fears have merit. Quite simply, people aren’t using the core Facebook platform as much as they used to anymore. But also quite simply, that doesn’t matter. Facebook is an ecosystem of social media and communication apps, and the growth in the popularity of many of those apps is enabling Facebook’s dominance of the digital world to increase.

That’s right. Despite a drop in engagement levels on the core Facebook app, Facebook’s digital dominance is as strong as ever and still growing. There are six social media apps in the world with 1 billion or more users. Facebook owns four of them, including the most popular one – the core Facebook app – and the two fastest growing apps – Instagram and Messenger.

Meanwhile, everyone is saying that the decline in the popularity of News Feed and the increased interest in Stories is killing Facebook stock. But that’s not true. FB owns three of the four most popular Stories apps in the world, and it owns the three fastest growing Stories apps.

In other words, most consumers are still frequently using Facebook’s apps. As a result, all of those ad dollars that are still chasing the consumer and flowing into the digital world will inevitably find their way into the Facebook ecosystem. Consequently, Facebook’s biggest secular tailwind – digital advertising growth – remains as strong as ever. Eventually, the market will realize that, and Facebook stock will soar towards $200 and higher.

Facebook Is the King of Social Media

Bears say that engagement on the core Facebook app is falling, and that this decline will ultimately result in a weakening of Facebook’s digital dominance. But the numbers don’t support that thesis at all.

With the cumulative popularity of Facebook, WhatsApp, Messenger, and Instagram, Facebook dominates the global social media landscape. All four of those apps have more than 1 billion users each. There are only two other 1 billion user apps in the world: YouTube and WeChat. Facebook’s ecosystem has a combined 6 billion users, although of course many users have joined multiple apps owned by Facebook.

Here are the exact data on monthly average users, per Statista and updated to reflect Q2 numbers:

1. Facebook: 2.2 billion MAUs (owned by FB)
2. YouTube: 1.9 billion MAUs
3. WhatsApp: 1.5 billion MAUs (owned by FB)
4. Messenger: 1.3 billion MAUs (owned by FB)
5. WeChat: 1.06 billion MAUs
6. Instagram: 1 billion MAUs (owned by FB)

Moreover, the trend is Facebook’s friend. Although bears are saying that engagement on the core FB app is falling, the app’s monthly active user base actually grew by 11% year-over-year last quarter. Meanwhile, Instagram is growing at a roughly 40% rate while Messenger is growing at a 30% rate, making those two  the fastest-growing apps with at least 1 billion users. Finally, WhatsApp is growing at a 25% clip, which isn’t too shabby.

Here is data on the growth of the apps with at least 1 billion users, based on rough estimates of sparsely available public data:

1. Instagram: +40% YoY (owned by FB)
2. Messenger: +30% YoY (FB)
3. YouTube: +30% YoY
4. WhatsApp: +25% YoY (FB)
5. Facebook: +11% YoY (FB)
6. WeChat: +10% YoY

FB Is the King of Stories

Not only is Facebook the king of the whole social media space, but FB is king of the most important area of social media: Stories. It is no secret that social media users are gradually moving away from News Feeds and towards Stories. Initially, market observers thought that was a tailwind for Snap (NYSE:

SNAP) and a headwind for FB stock. But FB has begun incorporating Stories into its many apps, and the results speak for themselves.

There are four major apps in the world that feature Stories. Although FB was late to the Stories game, Facebook now owns the three most popular Stories apps, and all three of them are at least 60% bigger than Snapchat. These four major Stories apps have a combined total of about 1.3 billion daily active users, although overlap is a factor here again. But the core Facebook app alone has 1.15 billion daily active users.

Here are the exact rankings of the most-used Stories apps:

1. WhatsApp Status: 450 million DAUs (owned by FB)
2. Instagram Stories: 400 million DAUs (FB)
3. Facebook/Messenger Stories: 300 million DAUs (FB)
4. Snapchat Stories: 188 million DAUs

Moreover, just like on the social media front, Facebook’s suite of Stories apps is also growing at the quickest pace in the industry. The numbers for WhatsApp, Instagram, and Facebook Stories aren’t public, so we have to live with the sporadic updates Facebook’s management gives us. But, based on those updates, we can see that all three of Facebook’s Stories apps are growing at a healthy rate, led by WhatsApp Status’ 7% monthly growth. Meanwhile, Snapchat’s user base is actually falling.

Here are my rough estimates of the monthly growth rates of the four largest Stories apps:

1. WhatsApp Status: +7%/month (owned by FB)
2. Instagram Stories: +3.5%/month (FB)
3. Facebook/Messenger Stories: +3.5%/month (FB)
4. Snapchat Stories: -0.5%/month

Facebook Stock Is Way Undervalued, Given Its Secular Tailwinds

In summary, Facebook still dominates the social media landscape. It’s as dominant as ever in social media, and it continues to grow because Instagram, Messenger, and WhatsApp all continue to expand rapidly. FB also dominates the Stories subset of social media which has entered hypergrowth territory. Facebook owns the three largest and fastest growing Stories apps in the world.

Overall, FB continues to dominate the digital world. That means that everywhere the consumer is, Facebook is there, too. Ad dollars follow consumers, so if consumers are still engaged across the entire Facebook ecosystem, then ad dollars will continue to find their way into the Facebook ecosystem.

Thus, Facebook’s growth outlook is the same as it always has been. As long as digital advertising remains a secular growth industry, FB will remain a secular growth company, and Facebook stock will head higher.

Worldwide digital advertising growth is expected to remain robust over the next several years. Facebook stock, trading at just 20 tines the company’s forward earnings, has not priced in that growth. Thus, the risk-reward ratio of Facebook stock looks highly favorable.

Consequently, Facebook stock should be bought at current levels.

As of this writing, Luke Lango was long FB stock.