Facebook (Stock Ticker – FB) stock surged to a new 52-week high of $120.79 in premarket trading this morning on the heels of last night’s strong earnings report. Wall Street is euphoric as the social network managed to surpass an extremely high bar of expectations. Shares are up 8.37% at $118.05 as of this writing as the analyst reports about price target increases continue to pour in.
Facebook (FB) users spend almost an hour a day
Facebook Inc (NASDAQ:FB) reported adjusted earnings of 77 cents per share on $5.38 billion in revenue, beating the consensus estimates of 62 cents and $5.26 billion. Ad revenues grew 76% year over year to $4.26 billion. In North America alone, the social network added more than $1 billion in ad revenue for the second consecutive quarter, notes Morgan Stanley analysts. Adjusted EBITDA beat consensus as well, coming in at $3.35 billion.
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The social network had 1.65 billion monthly active users at the end of the quarter who spend an average of 50 minutes per day. MS analyst Brian Nowak also noted that the increase in monthly active users during the first quarter was the highest it’s been in five years, adding that while growth was especially strong in the U.S., India and Brazil, it beat his firm’s estimates in all four of Facebook’s regions.
Engagement also beat his estimates with the 66% DAU/ MAU ratio beating his expectations by 60 basis points. Time spent on Facebook, Instagram and Messenger increased 9% year over year from 46 minutes in the year-ago quarter to 50 minutes in this year’s first quarter. Nowak and team called this growth “particularly impressive” because Facebook Inc (NASDAQ:FB) grew its total daily users 13% or 122 million. They expect engagement to continue to improve the social network’s monetization opportunities as well.
Credit Suisse bumps up price target
Credit Suisse analyst Stephen Ju bumped up his price target for Facebook stock slightly from $142 to $145 per share and highlighted how the platform’s new products have ramped, boosting its results. Also acceleration of adoption in the Asia Pacific region helped boost the company’s top line. He noted that management suggested that even though this is the first year we will see any impact from the Oculus VR headset, Payments and Other revenue will decline this year.
Ju believes the social network will be able to keep pushing long-term revenue growth without materially lifting ad loads with near-term drivers including Instagram and video ads.
Other price target increases for Facebook (FB) stock
Of course there’s a long list of firms that increased their price targets for Facebook Inc (NASDAQ:FB) stock. RBC Capital Markets analysts upped their target from $160 to $165 per share, while Jefferies analysts significantly raised theirs from $145 to $160. Deutsche Bank analysts also significantly raised their target from $145 to $160 per share. BMO Capital Markets analysts increased their target from $133 to $141 per share.