Facebook Inc (FB) 4Q Preview: Strong Demand For Ad Inventory; Buy

Updated on

According to Topeka Capital, Facebook is looking strong ahead of revealing its 4Q13 results, and analyst Victor Anthony recommends a Buy.

Facebook Earnings

Facebook Inc (NASDAQ:FB) is scheduled to report 4Q13 results after the close on Wed, Jan 29th. We are estimating revenues of $2.35B, +48.7% YoY, up from $2.27B previously, and Non-GAAP EPS of $0.27, up from $0.26 previously. Our checks came back consistent, that is, pricing increased materially in 4Q on the strength of increased demand for Facebook’s inventory due to better ad ROI. Looking out over the next two years, Facebook Inc (NASDAQ:FB)’s ad product cycle (video ads, Instagram ads, and eventually Graph Search) should lead to above consensus results. Increased mobile monetization and increased adoption of existing ad units such as FBX, Custom Audiences, and App Installs should also contribute to upside. FB remains under-penetrated relative to its potential advertiser uptake (1mm advertisers vs. 18mm local businesses with Facebook pages), and is at the forefront of the secular ad shift towards digital/ mobile. We continue to recommend investors actively purchase Facebook’s shares.

About Facebook

Facebook Inc (NASDAQ:FB) is with 1.19 billion monthly active users the largest social network in the world. It was founded in 2004 by Mark Zuckerberg who was a student at Harvard University at that time. Right now, the company has 5,800 employees and is headquartered in Menlo Park, California. On the 18th of May 2012, its stocks began trading on the NASDAQ stock exchange. Users can log into their account and communicate with friends, share pictures, videos and ‘like’ products they are interested in, all free of charge. The Timeline tool allows users to display events that matter to them chronologically such as education, work history, parties, relationships and contact details. This can be either shown to connected friends, friends of friends or everyone.

Facebook News Feed is another feature to exchange information

The Facebook News Feed is another feature to exchange information. It pushes the latest posts, events, group memberships and photos from friends into a list format which is shown on the user’s Facebook page. Photo albums can be created, allowing the user to tag other people on their pictures, join groups and organizing or express the participation in events. Further tools allow to play games, locate friends, ’subscribe’ celebrities, chat, and send e-mails. The popularity of the network has grown rapidly over the last years. The Dr. Kalliwoda Social Media Survey 2013 found a level of awareness of 72.2% and a usage rate of 53.3% making it the most used social medium. 45.7% the survey’s social media using participants selected Facebook Inc (NASDAQ:FB) as their main social media application. Currently, it has 1.19bn Monthly Active Users (users who visited Facebook Inc (NASDAQ:FB) or took an action to share content or activity with his or her friends or connections via a third-party website that is integrated with Facebook Inc (NASDAQ:FB), within the previous 30 days). The number of Daily Active Users increased steadily over the last four years as well

Leave a Comment