As the peak of earnings season continues, Piper Jaffray analyst Gene Munster is weighing in this evening on social media giant Facebook Inc (NASDAQ:FB) and e-commerce giant eBay Inc (NASDAQ:EBAY), with mixed ratings and views.
Facebook shares are up nearly 9% in after-hours trading, after the company topped Wall Street’s estimates for both revenue and earnings in the fourth quarter.
In reaction, Munster reiterated an Overweight rating on the stock, with a price target of $155, which implies an upside of 64% from current levels. Munster is one of Facebook’s biggest bulls, and he is also one of the top analysts rated who cover the stock.
The analyst commented, “Facebook reported Q4 revenue of $5.84 billion, 9% ahead of Street estimates. The upside was driven by an acceleration in ad monetization during the quarter. ARPU accelerated to 37% growth y/y in Q4 vs 28% in Q3. Looking to the earnings call, we expect commentary around operating expense growth for 2016 (we expect non-GAAP OPEX to grow 35% y/y). Additionally, given negative commentary about the macro environment from Apple last night, we expect Facebook may offer some cautious commentary about the overall macro environment.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a yearly average return of 17.9% and a 58% success rate. Munster has a 33.3% average return when recommending FB, and is ranked #6 out of 3607 analysts.
Out of the 46 analysts polled by TipRanks, 41 rate Facebook stock a Buy, 4 rate the stock a Hold and 1 recommends a Sell. With a return potential of 27%, the stock’s consensus target price stands at $119.78.
On the flip side, eBay shares are falling nearly 11% in after-hours trading, after the company issued weak guidance for the current quarter and disappointing sales for the holiday period.
Munster commented, “eBay guided 2016 revenue 4% below the Street, which is consistent with our belief that eBay will continue to struggle to return to eCommerce growth. We believe that eCommerce is structurally shifting away from intensive search models towards automated, simplified and/or curated models. We believe repositioning eBay’s brand in the consumer’s mind will continue to prove difficult, however, given EBAY’s valuation we believe these expectations are baked in.”
According to TipRanks, Munster has a 2.6% average return when recommending EBAY. As of this writing, out of the 10 analysts polled by TipRanks in the last 3 months, 5 rate Ebay stock a Buy, while 5 rate the stock a Buy. With a return potential of 25.4%, the stock’s consensus target price stands at $33.13.