Facebook (FB) earnings: is the stock poised for recovery?

12:04 am ET, 29 Oct 2018

Facebook, Inc. (FB) shares are trading at $146.20, down -3%. The company is announcing its quarterly earnings results on Tuesday after the market close. What's driving Facebook stock price?  What's FB stock price forecast?

Facebook is the world’s largest social media network. The stock fell 15% in the past year. It is trading at a P/E ratio of 20.09, a significant discount to its five-year average.

Investors are showing interest in the stock because of untapped advertising revenue, which grew 42% in the previous quarter. On the other hand, some bearish investors worry about lower margin guidance the company projected.  Also, social media companies such as Facebook have been experiencing quite a lot of criticism and even skepticism in the mainstream public lately.   Last quarter’s revenue rose 42% to $13.23 billion and earnings per share came at $1.74 compared to $1.32 for the same period last year. Daily active users increased by 11% year-on-year to 1.47 billion.

Third-quarter results will be released after market close on October 30, 2018. Analysts expect the company to earn $1.48 per share on revenue of $13.82 billion. The company beat analysts’ estimates three times in the previous four quarters.

What is the sentiment towards the FB stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative.

Over the last month, Facebook, Inc. (FB) returned -6.99%.

Facebook, Inc. (FB) average analyst price target ($205.96) is 35.91% above its current price ($151.54).

For the latest price and information on Facebook, Inc., please visit Finstead and search for "FB price" or "FB news".

Snap (SNAP) earnings preview: focus on user and revenue growth

4:34 pm ET, 31 Jul 2018

Snap Inc. (SNAP) is expected to report earnings on August 7 after market close.  The report will be for the fiscal quarter ending June 2018. Shares are trading at 12.27, down -4.36%.

What are SNAP earnings expectations?  What news should investors be paying attention to?

Snap is the maker of one of the most popular social networking apps, Snapchat, which has captured 158 million users to date, most of whom are between the ages of 18 and 24. The company is starting to attract the attention of advertisers with a growth trajectory toward $1 billion in revenue. However, there is no guarantee that Snap will effectively monetize these users on a consistent basis.

Snap's competition, which includes Facebook with nearly 2 billion users, is overwhelming. In particular, Instagram, owned by Facebook, may emerge as a substitute for Snapchat. The larger ecosystems of Snap’s competitors may have also created somewhat of an exit barrier for their users, which could further limit the growth acceleration of Snapchat users. 

While digital ad budgets continue to grow, so does the number of ad inventory providers in the space.  There is no guarantee that a larger portion of new digital ad dollars will flow to Snap. Facebook and Alphabet’s Google, which have proven the value of their ad inventories to advertisers over the years and together dominate the market, will probably continue to take more digital ad dollars over time.

Snap Inc. has a mixed history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Missed analyst EPS estimates by 2 cents ($-.16 actuals vs. $-.14 forecast) in FQ2’17;
  • Delivered on the analyst EPS estimate ($-.14 actuals vs. $-.14 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 2 cents ($-.13 actuals vs. $-.15 forecast) in FQ4’17;
  • Delivered on the analyst EPS estimate ($-.17 actuals vs. $-.17 forecast) in FQ1’18.

For FQ2’18, EPS is expected to decline by 6% year-over-year to $-.17, while revenue is expected to grow 39% year-over-year to $253 million.  

Over the last month, Snap Inc. (SNAP) returned -6.26%.

Snap Inc. (SNAP) average analyst price target ($11.74) is -4.32% below its current price ($12.27).

For the latest price and information on Snap, please visit Finstead and search for "SNAP price" or "SNAP news".

Facebook (FB) earnings preview: still no revenue diversification?

2:15 pm ET, 23 Jul 2018

Facebook, Inc. (FB) is expected to report earnings on July 25 after market close.  The report will be for the fiscal quarter ending June 2018. Shares are trading at 207.40, down -0.36%.

What are FB earnings expectations?  What news will the market be watching out for?  

Facebook continues to benefit from an increased allocation of marketing and advertising dollars toward online advertising, more specifically mobile and social-network ads where Facebook is especially well positioned. The firm’s Facebook app, along with Instagram, Messenger, and WhatsApp, is among the world’s most widely used apps on both Android and iPhone smartphones. 

Facebook is taking steps to further monetize its various apps, such as launching interactive video ads and chatbots. As usage of messaging apps on mobile devices continues to increase, the firm will be using bots within its Messenger app to place native ads and create brand interaction for users and brand names, possibly resulting in higher ROI for advertisers. 

The firm is also applying artificial intelligence and virtual and augmented reality technologies to various products, which may increase Facebook user engagement even further, helping to further generate attractive revenue growth from advertisers in the future. 

The market is looking to see how quickly Facebook will diversify its revenue. The company is currently a one-trick pony and will be affected severely if online advertising no longer grows or if more advertising dollars shift to competitors such as Google or Snapchat.

Facebook, Inc. has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 18 cents ($1.32 actuals vs. $1.14 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 30 cents ($1.59 actuals vs. $1.29 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 25 cents ($2.21 actuals vs. $1.96 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 33 cents ($1.69 actuals vs. $1.36 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 32% year-over-year to $1.74, while revenue is expected to grow 44% year-over-year to $13.43 billion.  

Over the last month, Facebook, Inc. (FB) returned +5.9%. 

Facebook, Inc. (FB) average analyst price target ($220.97) is 6.54% above its current price ($207.40).

For the latest price and information on Facebook, Inc., please visit Finstead and search for "FB price" or "FB news".

Alphabet (Google), Apple, Amazon or Facebook: who will win the race?

1:59 am ET, 08 May 2018

This past weekend we asked stock investors on Twitter: which company among the tech giants (Google / Alphabet, Apple, Amazon or Facebook) will outgrowth the competition?  We got some pretty insightful responses from our Twitter audience and are sharing with you their growth predictions in this Finstead Bites post.

Our Twitter poll shows, investors feel more optimistic about Alphabet (Google) and Amazon, and less optimistic about Facebook and Apple when it comes to those companies' growth prospects. 

Here is the poll question, verbatim: 

đź’ˇWhich company do you think will grow the most in the next 5 years? (To clarify: by growth, I mean market cap growth.)

And here are the responses:  

Buy-side stock analysts, on the other hand, do not see as much stock price upside for Amazon and envision a greater upside for Facebook.  This is somewhat understandable, given Facebook's recent snafu caused by user data leak.  

We consulted Finstead to find out  price target upside for each of those stocks (e.g., searched for "GOOGL upside")--and here is what we found out:

  • GOOGL price target upside is 21.09%.
  • FB price target upside is 25.68%.
  • AAPL price target upside is 3.73%.
  • AMZN price target upside is 3.96%.

The investors we polled on Twitter feel optimistic about Alphabet (Google) for the following reasons:

  • Alphabet's history of execution is unparalleled... it has made significant investments to diversify its revenues, and the effort is paying off.
  • Online and mobile video consumption is going through the roof and Alphabet remains strongly positioned here with YouTube. In its race to target TV ad dollars, Alphabet allowed Nielsen and comScore tagging of YouTube videos to determine the effectiveness of YouTube vs (compared to TV ads)--and YouTube is winning thus far.
  • Android’s dominant global market share of smartphones leaves Google well positioned to continue generating top-line growth as search traffic shifts from desktop to mobile.

Comparing Alphabet and Amazon, it's important to note that those two are still fundamentally different businesses.  While they compete in many areas, they focus on different things.  

The two companies are in the same range based on the market capitalization.  However, Amazon employs a lot more people (over 340,000) than Alphabet (78,000+).  Amazon generates more revenue than Alphabet ($178B vs.  $111B), is growing significantly faster (38% vs. 24%), but is also less profitable (1.7% vs.  11.42%). 

For a detailed comparison of the two companies, please visit Finstead and type AMZN vs. GOOGL.  

Facebook (FB) earnings expectations: 5 things to watch

10:19 am ET, 25 Apr 2018

Facebook (NASDAQ: FB) stock slightly dipped in today’s trading. The social networking company is disclosing its earnings results after the close bell today.

In 2017, the stock appreciated 47%. But in 2018, it is down 12%.

Investors are wondering what to expect from Facebook earnings. 

The consensus analyst profit expectation is $1.36 per share on revenue of $11.4 billion for the quarter.

Facebook's main source of revenue is advertising. Its CEO Mark Zuckerberg said that he doesn't see any significant impact on the company's business stemming from the Cambridge Analytica issue.

But according to analysts, the top position that the social networking company has attained through so many years may be threatened. User trust is broken because of the data leakage issue, instigating uncertainty around user engagement and growth.

The legislative control of social networks is evolving fast. Legislations were introduced by 2 US senators to curb Facebook data collection, storing, usage and sharing. 

On May 25, EU's General Data Protection Regulation (GDPR) will come into effect. GDPR will let users control the way their personal information is stored and used. The firms that breach the rules will have to pay huge fines.

Ad prices are likely to surge because people spend less time on Facebook than before, leading to a reduction in ad impressions. The number of users in the US and Canada has declined in the previous quarter. 

For today’s earnings, the five key questions to watch out for are:

  • Is the number of users stable, or declining in developed markets such as the US and Canada? 
  • Are users spending less time on Facebook?
  • Are advertisers spending more or less money with Facebook?
  • Are there any indications of how the regulation may hit the bottom line?
  • Are the costs increasing?

What is the stock forecast for Facebook? Per Finstead Research, Facebook shares have an average price target of almost $224. It has an upside of about 40%.

The company has a fairly high valuation compared to its peers. Its P/E ratio is behind that of Google (GOOGL), Sina Corporation (SINA) and Twitter (TWTR).

For the latest news data on Facebook, please visit Finstead and type “FB news”, “FB stock price” or “FB price target”.  

Alphabet (GOOGL): Why Investors Think This Stock Is A Buy Now

4:08 pm ET, 26 Mar 2018

The similarity of Google’s and Facebook's business models, fueled by Facebook’s data leak, resulted in a dip for Alphabet’s stock price (NASDAQ: GOOGL) earlier last week. Both companies obtain the majority of their revenue from advertising. The impact is likely to continue until Facebook is completely cleared from the data leak scandal dating back three years.

Data is the driving factor behind IT companies such as Google, and cybersecurity breaches are at all-time high. The perceived lack of data integrity has affected investors’ sentiment about the advertising giants. 

However, the Facebook data breach is likely to be a temporary occurrence only.  Both Google and Facebook have a solid data governance model.  So now may be a good opportunity to buy these stocks at relatively low prices.

Google dominates mobile OS ecosystem.  More than 60% of the US and 80% of the global mobile OS market share is tied to Alphabet. 

Google’s core products are going strong.  Some core products and services that are doing well are YouTube, Gmail, Google Play, Pixel phones, and Google Cloud.

The Waymo subsidiary of Alphabet rules the autonomous vehicles sector. Waymo has also become one of the leading AI companies.

On the negative side, Google is facing tough competition from rivals like Amazon, particularly now that Amazon is gaining speed in the advertising space.  

Per Finstead Research, Google’s average price target is almost $1283.  Its price upside is 25% (just visit Finstead.com and type “Google price upside”).

Google has a fairly high valuation with respect to its peers. Its P/E ratio only lags that of YNDX and TWTR.

Twitter (TWTR): How Will The Stock Price Move?

5:53 pm ET, 20 Mar 2018

Facebook's (NASDAQ: FB) privacy issues have led to Twitter's (NYSE: TWTR) slump of over 10% today. This is because Twitter, as a social media company, derives revenue from ads, just like Facebook.

Its investors are obviously bothered by issues related to data security, corporate responsibility, as well as regulatory pressure. 

Investors perceive a change in the status quo of the social media companies.  Radical changes in the business models of Twitter, as well as Facebook, will become a necessity once users start deserting those social media empires (perhaps as a result of feeling frustrated about data breaches, such as the one that came from Cambridge Analytica).

The drop in Twitter's stock price is also attributed to the request made by the Israeli government for the removal of contents that spurred violence against the state

The Israeli government is even considering a legal action against Twitter, because of it failed to respond to the government's request. 

According to Finstead, Twitter has a negative price upside -21.73% (visit Finstead and type "TWTR upside").  Per Finstead research, the average price target is around $27.  

What are the prospects of the stock price rising? 

Twitter’s valuation ratio is relatively high compared to its peers (e.g., Zillow or JD).

If you’re a trader, there will be a point at which the stock will bounce back.  If you’re an investor, use your caution. 

Facebook (FB): Should You Buy The Stock Now?

6:31 am ET, 20 Mar 2018

The data incongruity issue has created a pressure on Facebook’s stock performance, which is down 6.79% in yesterday’s trading.  

Facebook is under huge pressure for letting the data company Cambridge Analytica acquire 50 million user profiles in the U.S., which the firm might have used to help Donald Trump in his election campaign.

The sell-off was instigated by a stipulation that Facebook allowed Cambridge Analytica to violate its terms of service since the firm used the data acquired by user submissions for commercial purposes.

From our perspective, the market might have over-reacted, since this problem was detected early and it was well taken care of by Facebook’s management.  

Facebook knew about the violation and blocked the controversial Cambridge Analytics application in 2015. The internet giant also ensured that all data acquired illegally was permanently destroyed.  

It is questionable whether all of the data was actually erased.

So we think this may be a buying opportunity for long-term Facebook investors.Based on Finstead research, Facebook’s stock price upside is 30%.

It is clear that the Facebook leadership team is trying to do the right thing to ensure consumer confidence.  

How high can the stock price go? According to Finstead, the average price target is almost $223.

Even though Facebook’s valuation is fairly high compared to its peers (its P/E ratio lags only that of GOOGL, SINA and TWTR), we see a potential for stock price appreciation because of the company’s high revenue growth (visit Finstead and type “FB growth” to get a sense of how high it is).  

Do you think Facebook will bounce back?

Snap Inc: Here Is What You Need To Know Prior to Earnings Call Today

1:58 pm ET, 06 Feb 2018

Snap Inc. is reporting earnings today after market close. The report will be for the fourth quarter last year that ended in December 2017.  According to Finstead Research, SNAP price target upside is -7.36% (visit Finbot and type "SNAP upside"). 

Here is what you need to know about Snap Inc. 

Snapchat is enhancing its services by developing engagement features such as Geofilters and context cards to find information about geotagged places, and incorporating 3D Bitmoji World Lenses in collaboration with Jeff Koons, a prominent artist.   It is also removing its dependency on search engines. 

According to a market research firm eMarketer, Snapchat has a higher number of teen users compared to Facebook and Instagram.  Also, the introduction of the location-based map feature has caused a 40% surge in the submission of stories.

Its investment in advertisement measurement solutions, collaboration with NBC News and Time Warner and incorporation of ESPN’s SportsCenter to the platform will play a significant role in attracting new subscribers.

But there are a number of items that worry investors about Snap Inc. 

Facebook and Instagram have been very successful at mimicking Snapchat's features. 

The absence of revenue diversification is apparent and becomes even more pronounced with a 60% year-over-year reduction in ad unit costs (i.e., cost per thousand impressions).

Snap spent roughly $40 million on the hardware product called Spectacles, which went nowhere. 

Also, Snap is not making significant efforts to attract an older generation.  It is competing head-to-head with Amazon Prime, Netflix, Hulu and Time Warner’s HBO in the video streaming market; however, its competitive advantages are unclear to investors.  

Facebook, Inc. (FB) Stock Guide

Updated at: 8:26 pm ET, 17 Sep 2020

Before we start: if you're looking for FB stock price, you can quickly find it out by visiting Finny and typing "FB quote". If you're looking for a quick scoop on FB stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "FB". You'll get all this info in one place. Or you can just type "FB news" to get the latest stock news.

Looking to buy or sell Facebook, Inc. (FB)? Interested in getting the full scoop on FB, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this FB stock guide, we'll address key questions about FB, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are FB earnings?
2. What is FB stock forecast (i.e., prediction)?
3. FB buy or sell? What is FB Finny Score?
4. What are the reasons to buy FB? Why should I buy FB stock?
5. What are the reasons to sell FB? Why should I sell FB stock?
6. What are FB key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are FB earnings?

FB trailing 12-month earnings per share (EPS) is $8.18.

Analyst Predictions

2. What is FB stock forecast (i.e., prediction)?

Based on FB analyst price targets, FB stock forecast is $286.04 (for a year from now). That means the average analyst price target for FB stock is $286.04. The prediction is based on 44 analyst estimates.

The low price target for FB is $120.00, while the high price target is $336.00.

FB analyst rating is Buy.


3. FB buy or sell? What is FB Finny Score?

#{finnyScore:100}Our quantitative analysis shows 5 reasons to buy and 0 reasons to sell FB, resulting in Finny Score of 100.

4. What are the reasons to buy FB? Why should I buy FB stock?

Here are the reasons to buy FB stock:

  • With more users and usage time than any other social network, Facebook provides the largest audience and the most valuable data for social network online advertising.
  • Facebook’s ad revenue per user is growing, demonstrating the value that advertisers see in working with the firm.
  • The application of AI technology to Facebook’s various offerings, along with the launch of VR products such as the Oculus Rift, will increase user engagement, driving further growth in advertising revenue.
  • Facebook has witnessed significant traction in online and mobile advertising spending in a short span of time. In 2017, mobile ad revenues grew 56% over 2016. The company stated that mobile conversions are on the rise as data from 17 markets showed that mobile accounted for 69% of online conversions on Black Friday and 64% on Cyber Monday.
  • Facebook is aggressively promoting “Live” in order to boost its top line. It intends to capture the opportunity presented by ever-increasing video viewing on social media platforms. Earlier, Facebook had mentioned that video was emerging as a “megatrend” on the same lines like mobile.
  • After opening its ad platform to worldwide advertisers last year, Instagram has emerged as an important cash cow for Facebook. Again, there were no exact numbers with regard to contribution from Instagram. It has expanded Dynamic ads to Instagram while adding features like Live and Boomerang to Stories.
  • Messenger, WhatsApp and Oculus are the other extremely prized possessions. Facebook is aggressively working on monetizing the opportunities presented by its subsidiaries. Chatbots and “conversational commerce” are likely to be the strategies for Messenger and WhatsApp.
  • Facebook has a strong balance sheet and generates significant cash flow, which makes it an attractive stock for investors. The company has cash and cash equivalents of $41.71 billion and recorded robust cash flow from operations of over $7.67 billion in the fourth-quarter of 2017. Free cash flow amounted to nearly $5.41 billion.
  • The company’s user base continues to grow at a significant pace driven by new features and tools that improve engagement. However, as developed regions mature, Facebook has taken measures to drive penetration in emerging markets of South East Asia, Latin America and Africa.
  • FB quarterly revenue growth was 10.70%, higher than the industry and sector average revenue growth (1.28% and 0.89%, respectively). See FB revenue growth chart.
  • FB profitability is improving. The YoY profit margin change was 2.30 percentage points. See FB profitability chart.
  • FB average analyst rating is Buy. See FB analyst rating chart.
  • FB average analyst price target ($286.04) is above its current price ($254.82). See FB price target chart.
  • FB cash to debt ratio is 5.29, higher than the average industry (0.17) and sector (0.17) cash to debt ratio. See FB cash to debt chart.

5. What are the reasons to sell FB? Why should I sell FB stock?

Let's look at the reasons to sell FB stock (i.e., the bear case):

  • Facebook is currently a one-trick pony and will be affected severely if online advertising no longer grows or if more advertising dollars shift to others like Google or Snapchat.
  • Despite rapid user growth, many of Facebook’s customers may also belong to other social networks, such as Snapchat, so the firm will continually have to fight to capture a user’s time and engagement with Facebook’s properties.
  • Regulations could emerge that limit the application and collection of user and usage data, which could minimize the value of Facebook’s aggregated data.
  • Facebook maintains a cautious stance on revenue growth. The last reported quarter was no different. Since the past few quarters, the company has maintained that ad revenues will continue to grow but will now face tougher year-over-year comparisons.
  • Although Facebook has significant growth opportunities in the emerging countries of South-East Asia and Africa, low internet penetration in these regions may negatively affect its expansion. Further, while the company can be accessed from Hong Kong, its usage has been restricted in mainland China due to excessive government regulations and censorship. This limits its growth opportunities in the Asian region (Facebook’s fastest growing user base in terms of geography).
  • As Facebook hosts a huge amount of personal data, it has been under constant scrutiny from privacy groups and federal agencies. This huge database is its primary asset for attracting advertisers. As a result, the company has been criticized for allegedly selling personal data to advertisers in order to boost its top line.
  • Facebook will likely be impacted because of the uncertainties relating to Brexit, given the fact that it will have to re-define everything from tax to data flow and privacy regulations for its operation in the U.K. Moreover, the company has its EU headquarters in Ireland, through which, it was getting certain tax benefits. Now due to Brexit, Facebook will have to chalk out a way to avoid paying higher taxes.

Key Stats

6. What are FB key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for FB:

Metrics FB
Price $254.91
Average Price Target / Upside $286.04 / 12.21%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Internet Content & Information
Sector Technology
Number of Employees 35,587
Market Cap $841.66B
Forward P/E Ratio 29.16
Price/Book Ratio 11.2
Revenue (TTM) $75.16B
YoY Quarterly Revenue Growth 10.70%
Profit Margin 31.30%

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