Facebook Inc. (NASDAQ: FB) has confirmed its earnings date to be Monday, October 25, 2021, after market close.
What to look for
Over the past month, Facebook has slipped over 14% following negative press and challenging times for growth stocks weighing on the shares. With a lot of media attention, investors will be keen on the social media company's earnings report expected on Monday, 25. The most important metric to watch is the daily active users across Facebook's family of apps, including Facebook, Messenger, WhatsApp, and Instagram. In Q2, the metric was up 12% YoY to 2.76 billion, and investors will be looking for some increase in Q3 2021. Regarding revenue, the company will not have trouble reporting solid growth considering in Q2, revenue was up 56%, and the momentum is expected to continue Q3.
Earnings: Stockearning’s Estimated EPS is expected to be $3.17 per share. Historical EPS performance shows that the company has topped estimates in nine (75) of the past 12 quarters and missed thrice (25%). In Q2 2021, the company reported EPS of $3.61 per share relative to $3.03 per share estimates.
Revenue: The company expects YoY total revenue growth to decelerate in the third and fourth quarters, considering the company laps increasing growth periods. The company anticipated increased targeted ad headwinds from the platform and regulatory changes. In Q2 2021, the company reported a 56% growth in revenue to $29.077 billion.
Stock Movement: Facebook stock has dropped 13.1% since the company released its Q2 earnings. Over the last 36 quarters, Facebook shares have been UP 20 times following earnings release. So, the historical price reaction suggests a 55% probability of the stock going UP after releasing its Q3 2021 earnings. According to the Stockearning algorithm, the predicted stock move on the first day is 6%, while the predicted move on the seventh day is 7%.
What analysts are saying
Tigress Financial analyst Ivan Feinseth raised his price target on Facebook shares from $430 to $466 and maintained a "Strong Buy" rating on the stock. The analysts believe Facebook's recent controversy following the leaking of internal documents by an ex-products manager to The Wall Street Journal ahead of an appearance before Congress has sent the stock down 15% from its all-time high at the start of September. Feinseth argued that Facebook would continue benefiting from considerable growth in the digital ad sector, the current shift to social commerce, and improving its apps with enhanced communication and e-commerce functionality. The analyst believes the social media company will overcome the controversy and continue creating shareholder value.
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