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The Zacks Analyst Blog Highlights: Facebook, Snapchat, Twitter, Google and Netflix
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For Immediate Release
Chicago, IL – July 25, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook , Snapchat (SNAP - Free Report) , Twitter , Google (GOOGL - Free Report) and Netflix (NFLX - Free Report) .
Should You Buy Facebook Stock Ahead of Q2 Earnings?
Shares of Facebook touched a new all-time high on Monday just two days before the company is set to report its quarterly financial results. Now the question is should investors buy Facebook stock ahead of Wednesday’s Q2 earnings release?
Overview
Facebook has been in the news for all the wrong reasons for much of the year, yet the company’s actual business remains strong. The firm’s daily active user figure popped 13% in the first quarter to hit 1.45 billion. Facebook’s monthly active user total climbed by the same percentage to hit 2.2 billion. Investors should also note that Facebook’s photo-sharing app Instagram recently hit 1 billion MAUs on its own, which tops Snapchat and Twitter’s combined user totals.
The social media company’s growing user base helps it continue to attract advertisers, which is hugely important since Facebook makes roughly 99% of its revenues from ads. Looking ahead, Facebook and Google are set to continue to grab a huge chunk of the total U.S. ad budget.
Meanwhile, Facebook has expanded its live streaming content, in the age of Netflix, with a focus on news-style shows as well as live sports. The company has also invested in VR and other potential growth areas. And, like Facebook did with Instagram, the firm will likely continue to try to scoop up the next hot tech startups coming out of Silicon Valley.
Price Movement & Valuation
Moving on, shares of Facebook have surged roughly 120% over the last three years and 76% during the last 24 months. Investors will also see that Facebook stock has soared since its late-March lows.
Facebook stock is currently trading at 24.3X forward 12-month Zacks Consensus EPS estimates, which represents a significant discount compared to its industry’s 33.4X average. Investors should also note that FB has traded as high as 31.5X over the last year, with a one-year median of 27X.
Extending our view further, Facebook is currently trading not too far above its five-year low, which it hit in March. Therefore, it is pretty easy to say that Facebook stock appears attractive at its current level.
Outlook
Our current Zacks Consensus Estimate is calling for Facebook’s Q2 revenues to touch $13.43 billion, which would mark a 44% climb from the year-ago quarter. For the year, Facebook’s top line is expected to expand by nearly 41% to hit $57.29 billion.
At the bottom of the income statement, FB’s adjusted quarterly earnings are projected to pop by 32.6% to reach $1.75 per share, while its full-year EPS figure is expected to expand by over 25%.
Earnings Trends
Investors also need to understand FB’s recent earnings revisions trends to see if they want to buy FB before it reports. Facebook has received four upward earnings estimate revisions within the last 60 days for both Q2 and fiscal 2018, against zero downward changes. Facebook has earned one upward revision for the same two periods, over the previous seven days.
However, Facebook’s Most Accurate Estimate—the representation of the most recent analyst sentiment—is calling for earnings of $1.74 per share, which is one cent worse than our current consensus estimate.
With that said, Facebook has topped our estimates in the trailing 11 periods. We judge the price effect of these earnings beats by comparing the closing price of the stock two days before the report and two days after the report, and FB stock has popped in eight out of these last 11 windows—including a 9.6% surge last quarter and a 3.2% climb in Q4.
Bottom Line
Facebook is currently a Zacks Rank #2 (Buy) and sports “A” grades for both Growth and Momentum in our Style Scores system. Based on Facebook’s continued importance to advertisers, its growing user figures across its many platforms, its solid valuation picture, and strong earnings trends, Facebook looks like it might be a stock worth buying before it reports its Q2 financial results after market close on Wednesday, July 25.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Facebook, Snapchat, Twitter, Google and Netflix
For Immediate Release
Chicago, IL – July 25, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook , Snapchat (SNAP - Free Report) , Twitter , Google (GOOGL - Free Report) and Netflix (NFLX - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Should You Buy Facebook Stock Ahead of Q2 Earnings?
Shares of Facebook touched a new all-time high on Monday just two days before the company is set to report its quarterly financial results. Now the question is should investors buy Facebook stock ahead of Wednesday’s Q2 earnings release?
Overview
Facebook has been in the news for all the wrong reasons for much of the year, yet the company’s actual business remains strong. The firm’s daily active user figure popped 13% in the first quarter to hit 1.45 billion. Facebook’s monthly active user total climbed by the same percentage to hit 2.2 billion. Investors should also note that Facebook’s photo-sharing app Instagram recently hit 1 billion MAUs on its own, which tops Snapchat and Twitter’s combined user totals.
The social media company’s growing user base helps it continue to attract advertisers, which is hugely important since Facebook makes roughly 99% of its revenues from ads. Looking ahead, Facebook and Google are set to continue to grab a huge chunk of the total U.S. ad budget.
Meanwhile, Facebook has expanded its live streaming content, in the age of Netflix, with a focus on news-style shows as well as live sports. The company has also invested in VR and other potential growth areas. And, like Facebook did with Instagram, the firm will likely continue to try to scoop up the next hot tech startups coming out of Silicon Valley.
Price Movement & Valuation
Moving on, shares of Facebook have surged roughly 120% over the last three years and 76% during the last 24 months. Investors will also see that Facebook stock has soared since its late-March lows.
Facebook stock is currently trading at 24.3X forward 12-month Zacks Consensus EPS estimates, which represents a significant discount compared to its industry’s 33.4X average. Investors should also note that FB has traded as high as 31.5X over the last year, with a one-year median of 27X.
Extending our view further, Facebook is currently trading not too far above its five-year low, which it hit in March. Therefore, it is pretty easy to say that Facebook stock appears attractive at its current level.
Outlook
Our current Zacks Consensus Estimate is calling for Facebook’s Q2 revenues to touch $13.43 billion, which would mark a 44% climb from the year-ago quarter. For the year, Facebook’s top line is expected to expand by nearly 41% to hit $57.29 billion.
At the bottom of the income statement, FB’s adjusted quarterly earnings are projected to pop by 32.6% to reach $1.75 per share, while its full-year EPS figure is expected to expand by over 25%.
Earnings Trends
Investors also need to understand FB’s recent earnings revisions trends to see if they want to buy FB before it reports. Facebook has received four upward earnings estimate revisions within the last 60 days for both Q2 and fiscal 2018, against zero downward changes. Facebook has earned one upward revision for the same two periods, over the previous seven days.
However, Facebook’s Most Accurate Estimate—the representation of the most recent analyst sentiment—is calling for earnings of $1.74 per share, which is one cent worse than our current consensus estimate.
With that said, Facebook has topped our estimates in the trailing 11 periods. We judge the price effect of these earnings beats by comparing the closing price of the stock two days before the report and two days after the report, and FB stock has popped in eight out of these last 11 windows—including a 9.6% surge last quarter and a 3.2% climb in Q4.
Bottom Line
Facebook is currently a Zacks Rank #2 (Buy) and sports “A” grades for both Growth and Momentum in our Style Scores system. Based on Facebook’s continued importance to advertisers, its growing user figures across its many platforms, its solid valuation picture, and strong earnings trends, Facebook looks like it might be a stock worth buying before it reports its Q2 financial results after market close on Wednesday, July 25.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.