We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Better Long-Term Buy: Facebook (FB) vs. Twitter (TWTR) Stock
Read MoreHide Full Article
Shares of Facebook climbed again Wednesday after the struggling social media company reported its Q3 financial results Tuesday. Facebook’s third quarter showed both signs of setbacks and positivity. Meanwhile, Twitter stock continues to surge after its Q3 earnings results impressed investors last week.
Q3 Positives - Facebook
Facebook posted adjusted Q3 earnings that jumped 10% to reach $1.76 per share. This crushed our Zacks Consensus Estimate that called for an 8% year-over-year decline to $1.46 per share. Facebook’s bottom-line beat and expansion came even as its costs and expenses jumped from $5.21 billion to $7.95 billion.
Meanwhile, FB’s Q3 revenues surged 33% to hit $13.73 billion, which did fall just short of our $13.81 billion estimate. Facebook closed the quarter with 1.49 billion daily active users, up 9% from the third quarter of 2017. The company’s monthly active users jumped 10% to 2.27 billion. DAUs and MAUs climbed by 11% in the second quarter.
Still, no matter how you slice it, Facebook’s user totals are mind-blowing, with the company estimating that more than 2.6 billion people now use Facebook, WhatsApp, Instagram, or Messenger each month—which is roughly 35% of the global population.
Twitter
Twitter’s adjusted quarterly earnings skyrocketed 110% to $0.21 per share, which blew away our Zacks Consensus Estimate of $0.14. Q3 also marked the fourth straight quarter Twitter posted GAAP profitability.
At the top of the income statement, Twitter’s quarterly revenues climbed 29% from $590 million in the prior-year quarter to reach $758.1 million. This growth represented the largest quarterly increase since the first quarter of 2016 and blew away our $703.6 million estimate.
Twitter’s average daily active user base popped 9%. This did fall short of both the year-ago period 14% growth and Q2’s 11% jump. But it was a good sign at a time when investors worried that Twitter’s user base would suffer greatly as it tries to clean up its platform from accounts that spread misinformation and “fake news.”
Maybe more importantly, Twitter's total ad engagements soared 50% and cost per engagement sunk 14%.
Price & Valuation
Moving on, we can clearly see in the chart that FB and TWTR have moved in the opposite direction as of late. It might also be shocking to see that FB is up only about 17% over the last two years, due to its 2018 decline.
Both Facebook and Twitter stock sit well below their 52-week highs despite their recent gains, which could make them attractive to some investors. Plus, Facebook stock is currently trading right near its all-time low at 18.7X forward 12-month Zacks Consensus EPS estimates. This is due both to its recent fall from grace along with its solid earnings outlook. Conversely, Twitter’s valuation picture remains sky-high.
FB Outlook
It is always worth remembering that as Facebook continues to grow it will be harder to post massive quarterly growth. Facebook has also seen its user growth slow in its most important regions. European MAUs fell by 1 million sequentially for the second quarter in a row, while U.S. & Canada MAUs popped 1 million from Q2.
With that said, Facebook’s average revenue per user in the U.S. and Canada—where it made roughly 49% of its revenues in the quarter—jumped 23% to reach $27.61. FB’s worldwide ARPU popped 20% from $5.07 to touch $6.09.
Looking ahead, Facebook’s Q4 revenues are projected to jump 26.6% to $16.42 billion based on our current Zacks Consensus Estimate. FB’s fiscal 2019 revenues are expected surge 24.2% over this year’s projected 36.3% climb to reach $68.79 billion.
The firm’s fiscal 2018 earnings are expected to climb 14.6%. But this figure could continue to slide as Facebook projects its operating margin will fall to the "mid-30s on a percentage basis" over a more than two-year period—FB’s Q3 operating margin sunk from 50% in the year-ago quarter to 42%.
Twitter
Twitter’s average monthly active users slipped from 330 million in Q3 of 2017 to 326 million. Twitter MAU’s also dropped by 9 million sequentially. Yet, the firm was able to post strong revenue results as it grabs a larger return from each user through ads and its data licensing business, which jumped 25% to $108 million.
The company’s fourth-quarter revenues are projected to climb by 17.9% to $862.73 million. TWTR’s fiscal 2018 revenues are expected to pop by nearly 22% to $2.98 billion.
Meanwhile, Twitter’s adjusted Q4 earnings are projected to jump 31.6% to $0.25 per share, while its full-year earnings are expected to soar nearly 80%.
Bottom Line
In the end, both Facebook and Twitter seem likely to remain popular and invaluable platforms for years to come. Advertisers will also continue to flock to the two social media giants as the likes of Amazon (AMZN - Free Report) and Netflix (NFLX - Free Report) continue to pull people away from traditional, ad-supported TV.
With all that said, Facebook, which also owns WhatsApp and Instagram is trading at a very reasonable valuation and will attract more advertisers through the sheer size of its user base. FB could also start to pay a dividend much sooner than Twitter. However, government intervention could make both TWTR and FB scary long-term holds.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
Image: Bigstock
Better Long-Term Buy: Facebook (FB) vs. Twitter (TWTR) Stock
Shares of Facebook climbed again Wednesday after the struggling social media company reported its Q3 financial results Tuesday. Facebook’s third quarter showed both signs of setbacks and positivity. Meanwhile, Twitter stock continues to surge after its Q3 earnings results impressed investors last week.
Q3 Positives - Facebook
Facebook posted adjusted Q3 earnings that jumped 10% to reach $1.76 per share. This crushed our Zacks Consensus Estimate that called for an 8% year-over-year decline to $1.46 per share. Facebook’s bottom-line beat and expansion came even as its costs and expenses jumped from $5.21 billion to $7.95 billion.
Meanwhile, FB’s Q3 revenues surged 33% to hit $13.73 billion, which did fall just short of our $13.81 billion estimate. Facebook closed the quarter with 1.49 billion daily active users, up 9% from the third quarter of 2017. The company’s monthly active users jumped 10% to 2.27 billion. DAUs and MAUs climbed by 11% in the second quarter.
Still, no matter how you slice it, Facebook’s user totals are mind-blowing, with the company estimating that more than 2.6 billion people now use Facebook, WhatsApp, Instagram, or Messenger each month—which is roughly 35% of the global population.
Twitter
Twitter’s adjusted quarterly earnings skyrocketed 110% to $0.21 per share, which blew away our Zacks Consensus Estimate of $0.14. Q3 also marked the fourth straight quarter Twitter posted GAAP profitability.
At the top of the income statement, Twitter’s quarterly revenues climbed 29% from $590 million in the prior-year quarter to reach $758.1 million. This growth represented the largest quarterly increase since the first quarter of 2016 and blew away our $703.6 million estimate.
Twitter’s average daily active user base popped 9%. This did fall short of both the year-ago period 14% growth and Q2’s 11% jump. But it was a good sign at a time when investors worried that Twitter’s user base would suffer greatly as it tries to clean up its platform from accounts that spread misinformation and “fake news.”
Maybe more importantly, Twitter's total ad engagements soared 50% and cost per engagement sunk 14%.
Price & Valuation
Moving on, we can clearly see in the chart that FB and TWTR have moved in the opposite direction as of late. It might also be shocking to see that FB is up only about 17% over the last two years, due to its 2018 decline.
Both Facebook and Twitter stock sit well below their 52-week highs despite their recent gains, which could make them attractive to some investors. Plus, Facebook stock is currently trading right near its all-time low at 18.7X forward 12-month Zacks Consensus EPS estimates. This is due both to its recent fall from grace along with its solid earnings outlook. Conversely, Twitter’s valuation picture remains sky-high.
FB Outlook
It is always worth remembering that as Facebook continues to grow it will be harder to post massive quarterly growth. Facebook has also seen its user growth slow in its most important regions. European MAUs fell by 1 million sequentially for the second quarter in a row, while U.S. & Canada MAUs popped 1 million from Q2.
With that said, Facebook’s average revenue per user in the U.S. and Canada—where it made roughly 49% of its revenues in the quarter—jumped 23% to reach $27.61. FB’s worldwide ARPU popped 20% from $5.07 to touch $6.09.
Looking ahead, Facebook’s Q4 revenues are projected to jump 26.6% to $16.42 billion based on our current Zacks Consensus Estimate. FB’s fiscal 2019 revenues are expected surge 24.2% over this year’s projected 36.3% climb to reach $68.79 billion.
The firm’s fiscal 2018 earnings are expected to climb 14.6%. But this figure could continue to slide as Facebook projects its operating margin will fall to the "mid-30s on a percentage basis" over a more than two-year period—FB’s Q3 operating margin sunk from 50% in the year-ago quarter to 42%.
Twitter
Twitter’s average monthly active users slipped from 330 million in Q3 of 2017 to 326 million. Twitter MAU’s also dropped by 9 million sequentially. Yet, the firm was able to post strong revenue results as it grabs a larger return from each user through ads and its data licensing business, which jumped 25% to $108 million.
The company’s fourth-quarter revenues are projected to climb by 17.9% to $862.73 million. TWTR’s fiscal 2018 revenues are expected to pop by nearly 22% to $2.98 billion.
Meanwhile, Twitter’s adjusted Q4 earnings are projected to jump 31.6% to $0.25 per share, while its full-year earnings are expected to soar nearly 80%.
Bottom Line
In the end, both Facebook and Twitter seem likely to remain popular and invaluable platforms for years to come. Advertisers will also continue to flock to the two social media giants as the likes of Amazon (AMZN - Free Report) and Netflix (NFLX - Free Report) continue to pull people away from traditional, ad-supported TV.
With all that said, Facebook, which also owns WhatsApp and Instagram is trading at a very reasonable valuation and will attract more advertisers through the sheer size of its user base. FB could also start to pay a dividend much sooner than Twitter. However, government intervention could make both TWTR and FB scary long-term holds.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>