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Facebook (FB) Bulls Get More Bullish on the Stock Following Q1’19 Earnings


Facebook (FB) started 2019 with a bang, posting tremendous first-quarter results. The social media giant’s stock has started 2019 with a bang, too, rising nearly 50%, including the after market session today (up 7.29%).

Revenue in the quarter soared 26% to $15 billion, which translated into $2.43 billion of net income, or $1.89 per share (excluding the FTC privacy fine). Analysts were modeling for $15 billion in sales and earnings per share of $1.62.

Daily active users (DAUs) came in at 1.56 billion, and monthly active users (MAUs) surpassed 2.3 billion for the first time. Within the U.S. — Facebook’s most important market — DAUs held stable sequentially at 186 million (186M in 4Q18), while European DAU improved by 4 million to 286 million.

Mobile ad revenues remain strong, accounting for 93% of total ad revenue, which is flat vs. 4Q18.

CEO Mark Zuckerberg said in a statement, “We had a good quarter and our business and community continue to grow. We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet.”

Wall Street is rewarding FB with chorus of ‘buy’ reiterations. Baird’s analyst Colin Sebastian reiterates an Outperform rating on Facebook stock with $195 price target.

Sebastian commented, “At first glance, we expect shares to move higher on a solid revenue and EPS beat, as well as moderating opex/capex growth (+4-5% AMC). We note that positive Q1 trends are consistent with our recent checks […] Gross margin pressure (81.3% in 4Q18 vs. 83.9% in 1Q18) likely reflects the ongoing impact of elevated video/content spend and capex depreciation.”

SunTrust’s Youssef Squali largely seems to echo Sebastian’s positive sentiment, maintaining a Buy rating and $210 price target.

Squali opined, “These results show continued market share gains relative to the overall digital advertising market; implying that value and market share gains within Internet and Digital Media continue to accrue to the largest players.”

All in all, Wall Street loves the big social empire, scoring one of the most bullish consensus ratings of the financial universe. TipRanks analytics demonstrate FB as a Strong Buy. Based on 40 analysts polled in the last 3 months, 34 rate a Buy on Facebook stock while 6 maintain a Hold. The average price target among these analysts stand at $197.17, which is in line with the current value — most likely a result of Wednesday’s quick surge and analysts’ inability to turnaround new price targets so quickly. (See FB’s price targets and analyst ratings on TipRanks)

 

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