Though it has been repeatedly hammered in the headlines since Trump’s election, for a time the social media giant was unruffled market-wise. Opening at $176.83, the stock had fallen to $150 by April, only to rally to an all-time high of $216.29 on the eve of its second quarter update in late-July.
Yet, since then, performance has dipped considerably. A 20% plunge following those aforementioned Q2 results, alongside the recent market sell-off, caused the company to hit a 15 month low of $148.88 in early October.
Facebook Inc now sits at a current trading price of $154.69 (Spreadex, 24/10/2018).
While its second quarter earnings beat estimates, at $1.74 per share against the $1.72 forecast, it missed in a lot of other key areas.
Despite rising an eye-catching 42% year-on-year to $13.23 billion, that was still below the $13.36 billion expected.
Similarly, daily active users may have jumped 11% to 1.47 billion, but that was nevertheless shy of the 1.49 billion sought by analysts.
Crucially quarter-on-quarter DAU growth was flat in the US, and actually declined in Europe, a concern given they are the company’s largest advertising markets. Related, the firm warned that total revenue growth rates would ‘continue to decelerate in the second half of 2018’, with a ‘high single digit’ percentage decline from prior quarters in both Q3 and Q4.
In terms of next Tuesday’s Q3 figures, analysts are looking for a 14.8% rise in EPS to $7.07 alongside a 36.4% jump in revenue to $55.43 billion.
As for users, investors may be more focused on any quarter-on-quarter decline in the US and Europe than the likely year-on-year increase in the total number.
Facebook Inc has a consensus rating of ‘Buy’ alongside an average target price of $204.72.
