One of the concerns Facebook Inc (NASDAQ:FB) investors have expressed is user engagement on the site. JPMorgan analysts Doug Anmuth, Kaizad Gotla, Bo Nam and Diana R Kluger say although those concerns have eased a bit, some investors are still worried about it.
Investors have specifically been concerned about falling engagement on Facebook’s desktop site, but the analysts say mobile use is more than offsetting desktop declines. Another area of concern is competing services, but they believe that these services “are having only a modest impact” on Facebook Inc (NASDAQ:FB).
Facebook doing well against competing services
They note that the July data from comScore shows that the social network’s total U.S. minutes rose to 137 billion during the month. That’s a 22 percent increase year over year. They said over the last year, the company’s share of total minutes has also increased from 14.3 percent to 15.8 percent. That share includes both desktop and mobile minutes.
According to JPMorgan, non-Facebook services like Twitter and WhatsApp increased their share of total Internet minutes from 1.6 percent to 2.3 percent. They said Facebook Inc (NASDAQ:FB)’s share fell 10 basis points sequentially, but competing services saw their share decline 30 basis points.
Facebook’s mobile engagement offsetting desktop
They also note that Facebook’s mobile minutes per unique user also rose in July, more than offsetting declines in desktop usage. They said average desktop minutes fell from 439 minutes in July of last year to 351 minutes this July. Meanwhile mobile minutes per unique user rose from 508 last year to 914 this year.
When comparing Facebook Inc (NASDAQ:FB)’s mobile usage share, they said it is still four times the amount of competing services combined. They said within smartphone minutes only, Facebook’s share is about 20 percent, while each of the others are in the mid-single digits. Last month they said although Facebook lost 100 basis points of mobile share sequentially, the combination of Instagram, Twitter, WhatsApp and Snapchat did also.
JPMorgan analysts maintain their Overweight rating on Facebook and $44 per share price target for the stock. Shares of the social network rose 3 percent in Monday morning trading, climbing to a new high and pulling the markets higher.
