Facebook’s posted a strong 59% growth in total revenues at $6,426 million, while Twitter’s quarterly revenue was up by only 20% year-over-year at $602 million.
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Facebook has 2,860,304,000 shares which are now outstanding with shareholders and have a price of 124.37 bringing Facebook’s market capitalisation to 355.74B United States dollars. The numbers easily topped analysts’ estimates of $6.02 billion in revenue and 82 cents in EPS.
Wall Street on Thursday reacted to the positive earnings with a 7.5 percent surge in Facebook’s shares ($132 per share) in after-hours trading. The stock kept floating in a price range of $102.82 – 104.45.
Of 50 analysts covering the stock, 46 have a “buy” or higher rating and three a “hold”, while only one has a “sell”. Facebook CEO and founder Mark Zuckerberg says that the company is looking into other areas where growth has no limits, like video – with Facebook Live being a huge tool recently. However, Facebook doesn’t plan to rush to monetize search. The time spent on the site by daily users also rose.
The analyst stated that the investment firm has set a price target of 160 on shares of NASDAQ:FB.
It also reported a 17 percent increase in daily active users to 1.13 billion on average for June 2016, while monthly active users increased by 15 percent to 1.71 billion in June.
“To give a sense of the scale of Facebook’s beat, its advertising outperformance vs. consensus expectations was nearly as large as the total advertising revenue base in the quarter for the industry’s #4 player, Twitter”, Pivotal Research analyst Brian Wieser said in a client note. But analysts think its turnaround will take a long time. The company has been beefing up its presence in the mobile video market, where Snapchat and YouTube pose strong competition.
“We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services”.
“(Facebook) is extremely well positioned for this”, he said.
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Still, only one brokerage cut its rating on Facebook’s stock. Facebook Inc was Downgraded by Monness Crespi & Hardt to ” Neutral” on Jul 28, 2016.
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The brokerage raised concerns both about the ad loads issue and the large capital spending it said would be required to build Facebook’s video offerings.
