Tag: Facebook Earnings

Facebook Posts Revenue Growth Despite Public Relations Fiasco

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech - Facebook Posts Revenue Growth


Introduction

Public relations fiasco is putting it lightly in the wake of the Cambridge Analytica data misuse scandal. Once the news broke that Facebook Inc. (FB) was behind the mishandling of user data that was shared with a politically connected firm during the 2016 presidential race, Facebook’s stock tumbled from $195 to $152 or a 22% slide. Mark Zuckerburg went into damage control mode via rolling out transparency tools, metrics, impacted user details and testifying before Congress. The border questions of potential regulation, public backlash, additional data misuse cases and whether or not any material impact to revenue, as a result, remain in question. Over the past few quarters, Facebook has ramped up spending on initiatives to combat fake news, ensure data integrity, implementing stringent guidelines on third-party data sharing and overall transparency within its platform. Thus far, the early fallout from the Cambridge Analytica scandal has been immaterial to revenue albeit the recent quarterly numbers only reflect roughly two weeks of post-scandal numbers. Facebook had already moved to overhaul its news feed in favor of “meaningful social interactions” versus “relevant content” to improve its user experience.

Despite all the headlines regarding the privacy scandal, Facebook posted a monster blowout for its Q1 2018 numbers. Daily active users rose 13% to 1.45B for March, and monthly active users also rose 13%, to 2.2B as of March 31, 2018. Ad revenues grew by 50% to $11.8 billion from a year-ago $7.9 billion. As a result, many Wall Street firms have increased their target prices as a result of Facebook’s monster growth. Wedbush raised its target to $275, Mizuho to $255; SunTrust to $230; Goldman Sachs to $225, Deutsche Bank to $205 and Stifel Nicolaus to $175. Facebook remains incredibly cheap considering its phenomenal growth with a P/E of 28.7 and PEG of 1.08 at a stock price of $174. I maintain my long thesis with a price target of $220 by the end of 2018. Continue reading "Facebook Posts Revenue Growth Despite Public Relations Fiasco" →

Will Facebook Finally Break Through $200?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB) is on tap to report Q4 FY2017 earnings along with its full-year FY2017 numbers. Facebook recently breached the $189 level as earnings approached, however it recently sold off from these highs following news that Facebook would overhaul its news feed in favor of “meaningful social interactions” versus “relevant content.” I think this news was timely with the upcoming earnings announcement as Facebook will once again deliver phenomenal growth numbers across the business with beats on both top and bottom lines. Once the growth trajectory is affirmed with EPS moving in lock-step, the stock only becomes cheaper, and thus this pull-back could be a rare buying opportunity before the stock breaking through the $200 barrier. Facebook ended 2017 with a monster return of 53%, however, considering its growth the stock remains relatively cheap with a P/E of 34.8 and PEG of 1.23 implying an annual EPS growth rate of 28.3%. Once the newly designed news feed launches in conjunction with earnings later this month, I think the stock could break through the $200 level imminently. I feel that Facebook represents value even after this massive run through 2017 and I maintain my long thesis with a price target of $230 by the end of 2018.

News Feed Overhaul

Facebook announced major changes are coming to its news feed to prioritize “meaningful social interactions” on the social media’s news feed as opposed “relevant content.” With this reformatting, users will start seeing less public content from businesses or publishers and more posts from their friends. Mark Zuckerburg expects that the time people spend on the social media network will decrease as a result however it will be “more valuable.” Facebook sold-off on the news as investors and analysts regarded this as an overall negative impact on earnings. Facebook sold-off over 5% on the news or $10 per share as analysts weighed in on the new roll-out. Overwhelmingly, analysts remain positive on shares of Facebook with JP Morgan’s Doug Anmuth maintaining his overweight rating and a $230 target price. I feel that the news feed overhaul will be negligible to earnings, especially over the long term. This sell-off is an excellent opportunity to enter the stock before what will likely be a fantastic earnings announcement. Continue reading "Will Facebook Finally Break Through $200?" →

Facebook Continues Double-Digit Growth - $200 Soon?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB) recently announced Q3 FY2017 earnings and once again delivered phenomenal growth numbers across the business with beats on both top and bottom lines with revenue of $10.33 billion and EPS of $1.59 translating into beats of $490 million and $0.31, respectively. Total revenue and net income were up 47% and 79%, respectively. Previously, I authored an article and put forth my thesis that Facebook was the preferred FANG stock, collectively comprised of Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG), considering its growth and valuation relative to its FANG cohort. The Q2 FY2017 earnings reinforced this thesis. Facebook had been on an uptrend heading into earnings and broke through the $182 level.

The stock declined after the earnings call due to talk that the company will increase expenses to beef up its security workforce to combat “abuse on our platforms, ” and as a result, the stock sold off a bit to settle at $179 the next day. The stock has had a tremendous run YTD and is up 55.5%. These numbers may seem staggering, and some may contend that buying at these levels would be cashing the stock. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with technology comparators such as Google, Netflix, and Amazon, collectively known as the FANG stocks, Facebook is far superior with a lower risk profile. Facebook’s projected growth is more significant than Google’s yet has a P/E ratio that’s in-line with Google’s and a fraction of Amazon’s and Netflix’s. I feel that Facebook represents value even after this massive run and I maintain my long thesis. Continue reading "Facebook Continues Double-Digit Growth - $200 Soon?" →

Upcoming Facebook Earnings - A Nonevent Long-Term

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Upcoming Earnings

Facebook Inc. (NASDAQ:FB) is due to announce earnings on July 26th after the market closes. Facebook tends to be volatile after earnings are announced and typically pop to the upside as Facebook’s earnings have continued to post robust growth. Back on June 2nd, 2017, I authored an article “Facebook Will Hit $175 By Year End” and with five more months to go before the end of the year, I think Facebook has a good chance of breaking through this number. Facebook has been on an uptrend heading into earnings and currently sits at $160 per share and while the stock is up 39% YTD. These numbers may seem staggering, and some would state that buying at these levels would be cashing the stock. Normally I would agree with this approach. However, I think Facebook is an exception to this situation. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with tech comparators such as Alphabet Inc. (NASDAQ:GOOG), Netflix Inc. (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN), collectively known as the FANG stocks, Facebook is superior with a lower risk profile. Facebook’s projected growth is greater than Google’s and just shy of Amazon’s yet has a P/E ratio that’s lower than Google’s and a fraction of Amazon’s and Netflix’s. Regardless of the upcoming earnings announcement, this will be an immaterial event to the long term narrative for Facebook investors. I feel that Facebook represents value even after this massive run YTD and continue my long thesis. Continue reading "Upcoming Facebook Earnings - A Nonevent Long-Term" →