On Friday, Facebook Inc (NASDAQ:FB) announced it would report second quarter financial results after the market’s close on July 26.
This will represent the company’s first quarterly report since it went public in May.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
It’s been a bumpy ride for Facebook and since its IPO, its share price has stayed below its $38 offering price. On Friday, shares closed at $31.09.
From Facebook’s first quarter report, revenue increased 45 percent as compared to the fourth quarter’s 55 percent rise. In the previous three quarters, sales had more than doubled, reported Bloomberg.
So what can investors expect to hear on July 26?
According to the Times of India, analysts, on average, believe Facebook will see a $0.12 cents per share profit with a $1.15 billion revenue. From more than a dozen reports, Morgan Stanley (NYSE:MS) along with other brokerage firms said on Wednesday it remains unclear on how Facebook will make their money as an increasing number of users log onto the social network from mobile sources such as smartphones and tablets.
Wednesday’s reports came from the banks that had been involved in Facebook’s IPO and it occurred after the expiration of the 40-day quiet period, reported Reuters. This was Wall Street’s widest review of the company and it included estimates of quarterly earnings between $0.08 cents and $0.29 cents.
Painting a grimmer outlook for earnings is Thomson Reuters StarMine’s SmartEstimates. It has forecast Facebook Inc (NASDAQ:FB) earnings at $0.104 cents per share. At issue is the stock’s intrinsic value; it is ranked at worse than 98 percent of stocks in StarMine’s North American world of 4,900 companies.
StarMine currently had Facebook’s intrinsic value at less than $10 and with this valuation, it suggests the stock should be trading at $9.57. With the stock’s current price, it means greater growth than what analysts have anticipated.
Furthermore, 16 firms have “Buy” ratings on Facebook; 16 have a “Hold” rating and two have a “Sell” rating. StarMine noted this represents a more pessimistic view than the usual Internet stock, according to Reuters.
With Facebook Inc (NASDAQ:FB)’s earnings report announcement on Friday, it did not state what company executives will participate in the the usual conference call that follows results with analysts.