FB Stock 2022: Facebook’s Stock Bounces Back: Facebook shares are going down! OK, so maybe I’m not breaking any news there, but I bet it wasn’t easy to open your brokerage account this morning and find out that the stock went down 18%. But wait… why did it go down? There must be something happening at Facebook to cause investors to doubt the direction of the company, right? Let’s take a closer look at Facebook stock today and examine what the cause of these wild swings in Facebook stock may be.
The video platform grew 30%, and it has 2 billion users worldwide.
If you’re a Facebook shareholder, there are some encouraging signs amid all of the doom and gloom. One is that daily active users, which declined in the last quarter for the first time, bounced back a bit from 1.93 billion to 1.96 billion (even as monthly active users declined). Another is that Messenger and WhatsApp both added more than 100 million users each during 2016, suggesting Messenger could be an interesting source of revenue down the road. And finally, Instagram Stories now has 250 million daily users—or about one-third of Snapchat’s total audience. That means it could eventually be a nice complement to Facebook’s core app. And let’s not forget that Facebook still owns two very valuable properties: Oculus VR and its WhatsApp messaging service.
The company earned $1.69 per share.
That was 14 cents ahead of expectations and still up from $1.42 a year earlier. Revenue rose 45% to $4.5 billion, topping forecasts of $4.38 billion. Daily active users, which declined in the fourth quarter for the first time, bounced back a bit from 1.93 billion to 1.96 billion. Share prices jumped 8% immediately after earnings were released and have climbed even higher since then on strong volume. This has been a brutal market for Facebook stock. Since February 26th, when Facebook reported its Q4 2015 results, shares are down over 30%. Today’s rebound is an encouraging sign that there might be hope left for those investors who got stuck holding Facebook stock over the past several months.
Sales climbed 42% to $13.2 billion.
Sales rose 42% to $13.2 billion, climbing past analyst forecasts of $12.8 billion. Digital advertising sales continue to be one of Facebook’s strongest growth drivers, with revenue growing 63% year-over-year and accounting for 87% of all ad sales. We had a good quarter and got a lot done, CEO Mark Zuckerberg said on a conference call with analysts. Our community has continued to grow, and our business is thriving. Now we’re
focused on bringing together our family of apps and services to create new opportunities for people. This will be an even more important part of our work going forward. The company reported earnings per share of $1.32, beating Wall Street estimates by 2 cents. The company reported earnings per share of $1.32, beating Wall Street estimates by 2 cents. Mobile ads accounted for 84% of total ad revenue in Q4, up from 76% in Q3 and 70% in Q4 2014.
Wall Street expected $13 billion, or $1.44 a share.
Facebook said revenue rose to $13.2 billion, compared with $8.3 billion a year earlier. That topped analysts’ average estimate of $13 billion, or $1.44 a share, according to Thomson Reuters I/B/E/S. Analysts were expecting 1.94 billion users on average for March 31; Facebook reported 1.96 billion users that day. It also beat estimates for monthly active users in Europe and Canada by about 2 million each. The company is still struggling in Asia and other emerging markets, where it has been trying to attract more users who don’t have high-speed internet connections. Its latest earnings report showed Facebook made progress there as well: Its daily active users grew 9% from a year ago, while its mobile daily active users jumped 14%.
Operating profit increased 38 percent to $2.45 billion when certain items were excluded.
That was short of expectations of $2.57 billion, according to analysts polled by Thomson Reuters. That was short of expectations of $2.57 billion, according to analysts polled by Thomson Reuters. The company’s revenue jumped 47 percent to $5.04 billion, also missing estimates of $5.15 billion. The company’s revenue jumped 47 percent to $5.04 billion, also missing estimates of $5.15 billion.
Analysts were expecting $2.23 billion.
On average, analysts surveyed by Thomson Reuters were expecting Facebook to report first-quarter earnings of $2.23 billion. The company had been expected to post revenue of $2.22 billion and a loss per share of 15 cents. However, analysts have recently raised their estimates for Facebook’s growth in advertising sales in 2015. As of April 29, analysts expect Facebook’s ad sales to rise 45% year over year in 2015, according to FactSet Research Systems Inc. That is up from a 38% increase predicted at the end of March.
Facebook’s problem? Mobile advertising revenue is growing slower than expected and might not meet analyst targets.
Goldman Sachs estimates it will be 15% of Facebook’s total revenue, while RBC Capital Markets has been more optimistic at 19%. Even then, a drop in Facebook shares might be justified. The problem? Mobile advertising revenue is growing slower than expected and might not meet analyst targets. Goldman Sachs estimates it will be 15% of Facebook’s total revenue, while RBC Capital Markets has been more optimistic at 19%. And even then, a drop in Facebook shares might be justified. Investors should not overreact to Facebook’s Q1 results, wrote Arvind Bhatia, an analyst with Sterne Agee CRT. The key question investors should be asking themselves is whether they believe mobile ad growth can accelerate meaningfully. Arvind Bhatia (@arvb01) March 26, 2014 (Arvind Bhatia) investors need to ask themselves about Facebook Ink?
Conclusion
Facebook bounced back on Tuesday after a brutal fourth-quarter earnings report sent its stock down 26%, its worst day ever. Daily active users, which declined in Q4 for the first time, rebounded a bit from 1.93 billion to 1.96 billion users, but fell short of expectations. Concern remains that Facebook’s ad load is too much for many people to handle.
