In the year since the company's IPO,
shares have been under significant pressure. First, it was
the initial day trading issues, then it was questions over
growth and the ability of the company to profit off of an
increasingly mobile user base.
These concerns helped to push the stock to a low of
$17.55/share, although the company had since rebounded and was
trading around the $26.50/share mark, giving the firm a nearly
double digit loss for the trailing one year time frame. This
sluggish trading made yesterday's earnings report vital for the
company-especially in light of choppy big tech earnings this
quarter-and FB did not disappoint.
FB Earnings in Focus
In the latest release
, FB posted earnings of $0.13/share, well above the Zacks
Consensus Estimate of nine cents a share. This represents a huge
increase from both the year ago and previous quarters too, while
revenues also crushed estimates with $1.83 billion reported
compared to an estimate of $1.61 billion.
The real promise from this report though came in the mobile
segment, which was long an anchor for FB shares. This segment
made up 41% of total ad revenue for the quarter, which was both a
huge jump from the previous quarter (30% of revenues) and the
year ago period (almost nothing).
With this incredible performance out of mobile, many are now
feeling more bullish about the stock and its outlook for the
future. In fact, shares were up over 25% in the first hour of
trading on volume that was far above normal. While this is
still below the IPO price, there is now hope for the stock in the
near term, something that investors haven't been able to say for
quite some time about FB.
But what do you think about Facebook?
Is this company's remarkable performance on the mobile segment
enough to sell you on the shares, especially since it has a Zacks
Rank #2 (Buy) and it is much better positioned than firms like
from this perspective?
Or are you viewing this as a great quarter that can't
continue, and that the company is just too overbought?
Let us know in the comments below!
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