Facebook Inc (FB) Earnings Preview: Stock Continues Upward March

Facebook Inc (NASDAQ:FB) is set to release its Q4 2017 earnings report on Wednesday after closing bell. Consensus pegs Facebook earnings at $1.95 per share on $12.5 billion in revenue. In the same quarter a year ago, the social media firm reported $8.8 billion in revenue and $1.21 per share in GAAP earnings.

Facebook stock has been rising steadily despite minor setbacks recently, and analysts generally expect it to continue its steady march upward.

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What to expect from Facebook Inc (FB) earnings for Q4 2017

In a note to investors on the Facebook Inc (FB) earnings release for Q4 2017, Wedbush analyst Michael Pachter said he expects the company to beat consensus on the back of continued growth in users and engagement. He believes the company added about 63 million monthly active users during Q4, bringing its total user base to 2.13 billion. He’s believes the platform added about 46 million daily users during the quarter to bring its total to 1.41 billion.

He noted that data from Alexa Top Sites indicates that the amount of global time spent on the social network seemed to grow throughout the fourth quarter. As a result, he’s expects growth in worldwide ad impressions and cost per thousand impressions to drive a 44% year-over-year growth in revenue.

He doesn’t expect the recently-announced algorithm changes to hold back the company’s growth. Facebook Inc (FB) said recently that it will prioritize content from users, and then it added selected publishers as well. Although for now, he said this could trim down ad inventory, he believes that eventually, the changes will end up being a net positive because ad prices should “ultimately adjust to offset any potential material decline in revenue growth.” Further, he expects the changes to improve user retention and engagement.

The Wedbush analyst maintains his Outperform rating and $230 price target on Facebook Inc (FB) stock.

Facebook Inc (FB) stock unhampered by another investment year

Facebook Inc (FB) stock more than recovered the losses noted earlier this month due to the algorithm announcements. It has also moved well past the setbacks it experienced upon management’s announcement that 2018 will be another year of investment. Thus, it would take quite a lot to derail Facebook Inc (FB) stock.

GBH Insights analyst Daniel Ives said in his preview note on Facebook Inc (FB) earnings that the company’s monthly active user base continues to be “the fuel” in its “tank” He expects the user base to keep growing while the company continues to monetize it, especially on Instagram, which he refers to as a “golden jewel” and half of “the core 1-2 punch” underlying his bullish view of Facebook Inc (FB) stock. He expects Instagram to be Facebook’s second platform with more than 1 billion users by the end of this year.

He also mentioned the algorithm changes in his note covering Facebook Inc (FB) earnings, but he said he’s looking forward to hearing more about the changes, noting that they are a “major near-term Street worry” for Facebook Inc (FB) stock. Ives maintains his Highly Attractive rating and $225 price target on Facebook Inc (FB) stock going into this week’s earnings release.

Facebook Inc (FB) stock rose 0.61% to close at $187.12 on Tuesday.