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Facebook Earnings Review: What Wall Street Thinks

  • Posted on May 12, 2017 at 8:50 am

NEW YORK (TheStreet) — Facebook’s (FB_) second-quarter earnings focused on mobile revenue. Shares were soaring in premarket trading Thursday as Wall Street raised price targets and upgraded shares.

 The Menlo Park, Calif.-based social networker earned 19 cents a share on $1.813 billion in revenue for the quarter, as mobile advertising revenue accounted for 41% of advertising revenue this quarter. Total advertising revenue was $1.6 billion, 88% of total revenue, and up 61% year over year.

Analysts surveyed by Thomson Reuters were expecting Facebook to earn 14 cents a share on $1.62 billion in revenue for the quarter.

The company ended the quarter with 1.15 billion monthly active users (MAUs), up 21% year over year. There was a 51% annual increase in mobile MAUs, which drove the strength in mobile revenue. Daily active users (DAUs) were 699 million, up 27% annually.

Following the earnings, many analysts were bullish, with several upgrading shares and raising price targets. Here’s what some analysts on Wall Street had to say:

JPMorgan analyst Doug Anmuth (Overweight, $44 PT)

“Facebook delivered its strongest quarter yet as a public company–results that we think could be thesis-changing for many–and we would continue to buy Facebook shares even after the ~17% move up in the after-market. Our revenue and nonGAAP EPS estimates increase 12% and 38% for 2013, and 22% and 46% for 2014.”

Topeka Capital Markets analyst Victor Anthony (Buy, $40 PT)

“Facebook needed to, and delivered, a blowout quarter. What is clear from the results is advertisers have validated Facebook as an advertising platform. For full year 2013, our revenue and Adj. EPS increases to $7.196B and $0.71, resp, from $6.733B and $0.63. We still see more upside for the stock and recommend purchase. There are several well defined catalysts over the next two years that should lead to further share price appreciation, including: 1) monetizing Instagram, which, per CEO Zuckerberg, will generate “a lot of profits”, 2) launch of auto-play video ads, 3) monetizing Graph Search, 4) a bigger push into e-commerce, and 5) the potential for S&P 500 inclusion. Further, only 1mm or 6% of FB’s 18mm potential advertisers are buying ads, implying a huge runway for advertiser uptake exists.”

Sterne Agee analyst Arvind Bhatia (Buy, $37 PT)

“We are incrementally bullish on FB’s prospects following 2Q results and believe the stock should be a core holding in Internet portfolios. 2Q’s highlight was Mobile advertising (+76% q/q versus consensus +20%). Overall revenue (53% y/y) and EBITDA (+57% y/y) accelerated from 1Q’s 38%/35% revenue/EBITDA growth. Better than expected user engagement, strong monetization and good cost control helped FB outperform even the most bullish expectations on the Street. Reiterating Buy.”

Oppenheimer analyst Jason Helfstein (Outperform, $36 PT)

“Following materially better than expected 2Q results, we are increasing our estimates and price target, and are reiterating our Outperform rating. 2Q upside was driven by higher advertiser demand for newsfeed, both on volume and price, and since mobile Newsfeed pricing is similar to desktop and advertisers are largely indifferent between mobile and desktop, revenues are tracking the consumer shift to smartphones. We believe this dynamic is an important differentiator vs. other ad-supported internet companies, that are being hurt by the mobile mix shift. As such, we are increasing ’13E and ’14E revenue by 3% and 5%, and non-GAAP EPS by 7% and 9%, respectively. Raising target to $36 from $32.”

Shares of Facebook were soaring following earnings, tacking on 30.48% to $34.59 in premarket trading.

Yahoo Acquires AdMovate To Increase Mobile Advertising

  • Posted on April 14, 2017 at 10:53 pm

News about the acquisition of Yahoo is still a lot to buy the company from a small start-up like Summly to large and are known as Tumblr. Today Yahoo has officially announced that it has acquired AdMovate, a private company. AdMovate focus to the world of advertising on mobile devices, they develop a solution that will bring mobile advertising to the target behavior. AdMovate itself also has confirmed this news, but both Yahoo and AdMovate not want to inform the amount of the approved agreement.
Now a team of technicians will AdMovate integrated with Yahoo advertising display team, based in Silicon Valley. Yahoo said that the acquisition is part of their move to invest more in technology advertising platform, so it will be easier for agencies and advertisers purchase. Yahoo CEO Marissa Mayer has even said many times that the company they represent the future of the mobile world so fair they are trying hard to improve their mobile services.

Facebook rallies 30%, logs best day ever

  • Posted on April 14, 2017 at 2:48 am

Facebook shares rallied an impressive 30% Thursday, allowing the stock to book its best one-day gain ever. And while shares remain about 10% below the May 2012 IPO price of $38, analysts are predicting that Facebook is finally on its way to reaching, and even crossing, that threshold.

“Facebook delivered its strongest quarter yet as a public company — results that we think could be thesis-changing for many,” said Doug Anmuth, a JPMorgan analyst who boosted his price target to $44 a share from $35.

Investors and analysts are most impressed by Facebook’s growing strength in mobile advertising — a part of the business they were initially most concerned about since Facebook lacked a clear strategy for mobile advertising despite the rapidly growing number of people using Facebook on their mobile phones and tablets.

“One year into Facebook’s mobile advertising efforts, mobile has increased from zero to 41% of total ad revenue,” Anmuth highlighted in a note to clients.

While the improvements have been gradual, Facebook blew everyone away this past quarter by generating 50% more in mobile ad revenue than what Wall Street was expecting.

Even after that stellar quarter, analysts say growth should remain strong as Facebook continues to shift toward more social ads that will become increasingly valuable to advertisers.

Analysts at JMP Securities, who increased their share price target to $38, said that social media giant’s second-quarter results suggest that “Facebook is increasingly becoming a ‘must buy’ for advertisers.”

Goldman Sachs analysts were also excited by Facebook’s significant improvement in mobile advertising. They put a bullish price target of $46 on Facebook shares.

“We continue to believe Facebook is at the center of the mobile ad revolution and see considerable opportunity for it to drive higher pricing on its ad units as brand and direct marketers alike take advantage of its broad reach and precise targeting,” said Goldman analyst Heather Bellini.

As Facebook (FB) shares surged, a number of investors were getting in on the action. Over 360 million shares of Facebook had exchanged hands Thursday, more than seven times the stock’s average daily trading volume.

The day’s surge pushed the value of Facebook to more than $80 billion, up from just over $60 billion as of Wednesday’s closing bell.

Facebook’s advance was also getting plenty of attention on Twitter.