What to Expect When Facebook Reports After the Close

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Facebook Inc. (NASDAQ: FB) is scheduled to release its most recent quarterly results after the markets close on Thursday. Thomson Reuters consensus estimates are calling for $2.19 in earnings per share (EPS) and $16.4 billion in revenue. The fourth quarter of last year reportedly had $1.44 in EPS and $12.97 billion in revenue.

The huge social media leader’s stock has been incredibly volatile and had an absolutely wretched 2018. Facebook is the largest social network, with over 2.0 billion monthly active users and over 1.4 billion daily active users. The company generates revenue from advertising and from payments, with over 95% of revenue from advertising. It generates close to 50% of revenues in the United States and Canada and is expanding rapidly in international markets.

In late December, infamous short-selling firm Citron Research changed its tune on Facebook. Two and a half years ago, Citron said that Facebook was a long-term short and that engagement levels would eventually top out. At the time, the stock was trading near $120 a share. In the past 30 months, Facebook has more than doubled its quarterly revenue and concerns of engagement have shifted to concerns of addiction, yet the stock was back down around $120 in late December. As a result, Citron came out with a $160 price target.

It also must be noted that the press has resorted to sensationalizing Facebook privacy issues, and that is not intellectually honest. Nowhere was this dynamic more apparent than in the recent “scandal” from the New York Times as it published a piece that claimed Facebook let third-party companies like Spotify and Netflix read private messages from Facebook users. The story hit the stock for 8%, but the reality was a lot more innocuous, as explained by Facebook.

Excluding Wednesday’s move, Facebook had outperformed the broad markets, with its stock up about 10% year to date. In the past 52 weeks, the stock was actually down 24%.

A few analysts weighed in on Facebook ahead of the results:

  • Credit Suisse has an Outperform rating and a $208 price target.
  • Goldman Sachs has a Buy rating with a $195 price target.
  • BMO Capital Markets rates it as Market Perform with a $163 target.
  • RBC has a Buy rating with a $190 price target.
  • JPMorgan has a Buy rating and a $195 price target.
  • Argus has a Buy rating.
  • Nomura has a Neutral rating with a $148 target price.

Shares of Facebook were last seen up about 1% at $146.11, in a 52-week range of $123.02 to $218.62. The stock has a consensus analyst price target of $184.67.

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