Facebook ‘appears to be in an ideal position’ and the action closed at an all time high
Facebook Inc. stock catapulted 7% to close at a record high Thursday after reporting its last quarter in full swing.
This came as no surprise to financial analysts, who flooded social media giant FB,
with praise following another successful quarter in ad sales as well as a spike in non-ad revenue on Wednesday.
“Facebook seems to be in an ideal place where it is growing its revenue at an all-time high while keeping the ad load relatively in check (evidenced by the 12% growth in impressions versus 8% DAU Y / Y),” said Ross Sandler, analyst at Barclays his target price at $ 410 of $ 350. “Emerging product areas such as trading, paid messaging, and creative tools offer bulls new upside scenarios.”
FactSet analysts, who raised their average price target on Facebook shares to $ 370.12, were sold on Wednesday in the company’s first-quarter tax report. Facebook crushed analysts’ estimates with $ 26.2 billion in revenue and net income of $ 9.5 billion, or $ 3.30 per share.
Advertising, which accounts for nearly all of Facebook’s sales, soared 46% to $ 25.4 billion as millions of small and medium-sized businesses turn to online ads to reach consumers during the pandemic. Google parent Alphabet Inc. GOOGL,
and Snap Inc. SNAP,
previously reported similar gains.
Oppenheimer analyst Jason Helfstein, in raising his price target to $ 375 from $ 350, praised Facebook’s acceleration in revenue on a two-year basis.
“GOOGL and FB’s first quarter results clearly indicate the continued pull ahead (PPF) in COVID demand, with both companies posting impressive acceleration in revenue growth, although (sic) we notion that FB was still more impressive, ”Evercore ISI analyst Mark Mahaney said in a note Wednesday night that reiterated an outperformance rating and a price target of $ 400. “We also believe that FB has been one of the most aggressive investors in new growth opportunities throughout this COVID period, which should set them in place for several years of sustained premium income growth.”
Growth in Facebook’s non-ad revenue from e-commerce, payments, and AR / VR is growing, analysts note. It jumped 146% to $ 732 million, leading Facebook chief executive Mark Zuckerberg to devote much of his opening remarks to that part of the business in a conference call with analysts. Wednesday evening.
Read more: Facebook shares hit record thanks to big jumps in sales and ad revenue
Indeed, Mizuho Securities analyst James Lee points out that Facebook Marketplace has over one billion monthly active users and that Facebook Shops has over one million monthly active merchants.
“The goal is to create a full-service commerce platform across all properties and geographies, including influencer-focused commerce on [Instagram] and Catalogs on WhatsApp, ”wrote Lee, who raised his price target to $ 400 from $ 350 while maintaining a buy note. “These tools allow 200 million businesses (only 5% are currently advertisers) on the FB platform to switch from offline mode to e-commerce, including payments and payments.”
Facebook’s first quarter results weren’t entirely perfect. Questions regarding Federal Trade Commission and State Attorney General antitrust lawsuits, as well as Apple Inc.’s AAPL privacy changes,
iOS continues to drag Facebook. The company’s chief financial officer, Dave Wehner, warned of potential headwinds in the second half of the calendar year due to both, in a statement and later in the analysts call.
While some investors are concerned about the impact of Apple’s iOS 14.5, which prevents developers of apps like Facebook from targeting advertising, Facebook COO Sheryl Sandberg assured analysts that the The company’s aggregate event measurement API minimizes the impact of Apple’s changes.
“We believe that targeting iOS14 headwinds, cookie depreciation and GAID may create obstacles down the road, but FB remains in great shape,” wrote Sandler of Barclay.