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Facebook
the strangers to controversy. Amid the Covid-19 pandemic, the social media giant is currently fighting a suit against a trust that threatens to break up the industry and is the subject of a debate over a law that has forced the web-success.
But his stock is not controversial on Wall Street.
Despite these challenges ahead, analysts are positive about Facebook’s fourth quarter, and the consensus earnings estimate is $ 3.54 a share on revenue of $ 26.41 billion, which means that the main line will grow by about 25% compared to a year ago. Of the analysts covering the name, 84% share Buy.
Ahead of Facebook’s fourth-quarter earnings, which it reports on Wednesday after the closing bell, the stock has risen 3.4% this year.
Facebook’s continued success as the advertising market recovers is no surprise. In a conference call last quarter, executives said revenue would grow above the 22% it reported for the third quarter, even amid coronavirus-related uncertainty .
“Facebook continues to face regulatory scrutiny, and continued criticism from human rights groups and campaigners about its policing of hate speech and misinformation, especially in the wake of the U.S. Capitol uprising on January 6, ”Wrote Wedbush analyst Michael Pachter in a messenger note.
Facebook permanently suspended President Donald Trump’s account on Jan. 6, and took steps to weaken content he saw inciting violence or weakening the election process after protesters stormed put on the Capitol. In a statement on January 21, Facebook said the Capitol riot was “an unprecedented set of events that called for unprecedented action.”
BofA Securities analyst Justin Post wrote in a note to clients on Sunday that he believes 2021 will be a good year for the company. Since it did not achieve the Nasdaq Composite in 2020, Facebook stock will benefit from moving online advertising budgets. More than 10 million advertisers are now on Facebook, which has turned to the platform to take advantage of the growing digital economy at the time of the pandemic, taking the plunge. into the e-commerce side.
Despite positive sentiment from analysts, it is clear that investors will be urging executives to answer questions about a complaint against the Federal Trade Commission, the decision to suspend President Donald Trump from the platform, and the use of the Facebook platform to spread misinformation about the presidential election.
Post says the tone of officers on the call can have a significant impact on the price of shares, and it will be important to monitor the qualitative reporting. “With stocks under pressure recently, we would expect a more optimistic tone in terms of business movement on the call, with the potential to help clear some of the recent changes to WhatsApp privacy issues and concerns Facebook content, ”wrote Post.
WhatsApp recently delayed the release of some privacy changes it made following a user backup.
While it’s not a large portion of the company’s total revenue, investors may want to listen for any statement about the company’s Oculus Quest 2 unit, which first debuted at the company. last year. The first version of the company sold well, and Barron’s he wrote positively about Quest 2. The sale of his Quest products is reduced to the “Other” revenue bucket, and is mixed with the sale of other products such as the Portal, among other things, and so it’s hard to know how well he’s doing.
Due to the pandemic, it seems that Facebook will not provide detailed instructions for the first quarter. Pachter wrote that Facebook, through the first quarter, will benefit from a return in demand for advertisers.
“We believe that Facebook’s revenue growth should be insulated to a greater degree than its peers because of the large-scale benefits and higher affiliation [return on investment] on advertising spend for a wide range of advertising, ”wrote Pachter.
Barron’s reiterating our positive outlook on Facebook stock last year, amid an advertising boycott staged by civil rights groups over concerns about hate speech and deceptive content on the plateform.
Corrections & Enlargements: Facebook earnings are expected to be announced after the close of trading on Wednesday. An earlier version of this article incorrectly stated that they were released Thursday.
Write to Max A. Cherney at [email protected]