For Immediate Release
Chicago, IL – January 29, 2020 – 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
FB, Amazon AMZN, Pinterest ( PINS Quick Quote PINS - Free Report) and Fox Corp. FOXA. Here are highlights from Tuesday’s Analyst Blog: Will Asia & Watch User Growth Aid Facebook (FB) Q4 Earnings? Facebook is set to report fourth-quarter 2019 results on Jan 29.
The company’s growing popularity in international markets, particularly Asia, is expected to have expanded the user base in the to-be-reported quarter.
The Zacks Consensus Estimate for Monthly Active User (MAU) in Asia stands at 1.040 billion, indicating 9.8% growth from the year-ago quarter’s reported figure. Notably, Asia-Pacific MAU increased 10.5% year over year in the third quarter.
Moreover, Daily Active User (DAU) in Asia is estimated to increase 10.9% from the year-ago quarter’s reported figure to 640 million. Notably, Asia-Pacific DAU grew 11.8% year over year in the last reported quarter.
Click here to know how the company’s overall fourth-quarter performance is likely to be. Security Initiatives Boost User Confidence
Facebook’s user base of more than 2.7 billion (including its Family of services — Instagram, WhatsApp and Messenger) presents a larger canvas for advertisers and makes the platform highly attractive.
Further, the company has chalked out initiatives to improve privacy, transparency and authenticity of ads and remove fake accounts from the platform over the trailing 12 months. The company has recruited 30,000 people and also made huge investments in AI systems to eliminate harmful content.
Further, the rollout of the “Off-Facebook Activity”
tool that enables users to better control their privacy, partnerships with independent fact-checking organizations and the “turn off location tracking” tool for Android users are some key initiatives, which are expected to have helped improve user confidence.
Notably, during the quarter, Facebook
settled a case with advertisers related to ad-metric and agreed to pay $40 million. Moreover, the company has been focusing on making the Messenger platform more popular for businesses.
Facebook Messenger’s vast user base of more than 1.3 billion is expected to have attracted ad revenues in the to-be-reported quarter. Featured advertisements allow businesses to boost revenues and provide customer service through Messenger. Reportedly, 20 billion
messages are exchanged between people and businesses every month.
However, Facebook’s efforts to make its platforms more secure have hurt ad-targeting capabilities of advertisers, which is likely to reflect on the top line in the to-be-reported quarter.
Notably, the company faces significant competition from Google, Twitter and Amazon for ad dollars. Moreover, Pinterest’s growing popularity is concerning for Facebook. Per a recent
report by eMarketer, the company surpassed Snapchat as the third-largest social media service in the United States, following Facebook and Instagram.
The Zacks Consensus Estimate for Facebook’s fourth-quarter advertising revenues is currently pegged at $20.57 billion, indicating growth of 23.6% from the year-ago quarter’s reported figure. However, the estimated growth rate compares unfavorably with the preceding quarter’s 28.4% (32% at constant currency).
Increased Sports Content in Facebook Watch
Additionally, Facebook’s investment in sports video content via partnerships with NFL and ESPN provides it a competitive edge against the likes of Twitter and Amazon.
Moreover, Facebook’s rights to stream La Liga matches in India and Premier League soccer matches in Cambodia, Laos, Thailand and Vietnam between 2019 and 2022 are expected to have expanded the Facebook Watch user base, which reportedly has more than 720 million monthly and 140 million daily users.
Further, during the quarter, the company inked a partnership with Fox Corp. division Fox Sports to bring more sports-related content to Facebook Watch.
Facebook Watch’s expanding user base, backed by the company’s efforts to boost engagement, is likely to have driven the top line in the fourth quarter.
Facebook currently carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here 5 Stocks Set to Double
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