Facebook (FB) Earnings At First Glance; GBH Weighs In
Can you feel the ground moving beneath your feet? Shares of Facebook (NASDAQ:FB) soared nearly 7% today after the social media giant delivered first-quarter financial results that crushed Wall Street’s expectations in an upside surprise. The shake, rattle and roll generated by today’s earnings report impressed, and in some cases, silenced some big bears, while the bulls finally have something to hang their hat on after the company have just gone through the darkest chapter in its history post Cambridge Analytica scandal.
Facebook reported profit of $1.69 per share on revenue of $11.97 billion for the quarter, beating Wall Street estimates of $1.35 and $11.41 respectively. In addition, the company added 49 million daily users, and now 1.45 billion people use the service every day, in line with the Street’s expectations.
GBH analyst Daniel Ives commented, “To this point, the bright spotlight and unprecedented criticism on Zuckerberg and Facebook in light of the Cambridge debacle has been a major black cloud over the stock along with regulatory concerns on the horizon and advertising revenues of $11.80 billion (growing 50% yoy) comfortably beating the Street’s $11.25 billion is a key initial victory for the name and a “pivotal barometer” to gauge any fundamental damage thus far post Cambridge, along with the previously announced NewsFeed overhaul.”
“We would characterize 1Q results as a relief and is a sign that so far the damage from Cambridge appears contained although this will be a long 3-6 months ahead to steer through this storm. In a nutshell, overall this should be another step in the right direction for Facebook after a month of navigating these unprecedented data concerns post the Cambridge debacle with the worries around regulatory headwinds and damage to the company’s advertising fortress a lingering black cloud over the stock,” the analyst concluded.
As such, Ives reiterates a Highly Attractive rating on Facebook shares. (To watch Ives’ track record, click here)
Most analysts back Ives’ confident take on the social tian, as TipRanks analytics showcase FB as a Strong Buy. Based on 34 analysts polled in the last 3 months, 31 rate a Buy on Facebook stock while 2 issue a Hold, and only one recommends a Sell. The 12-month average price target stands at $219.33, marking a nearly 37% upside from today’s closing price.