FB Hits 52-Week High, Shares Surge - Analyst Blog

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Shares of Facebook Inc. ( FB ) hit a new 52-week high of $62.50 on Thursday, Jan 30, 2014. The bullish run reflects Facebook's impressive fourth-quarter results and an optimistic guidance.

The closing price of Facebook on Jan 30 was $61.08, representing a strong one-year return of about 97.2% as compared with the 19.8% return from the S&P 500. Shares were up 12.7% ($6.85) in pre-market.

Since crossing the psychological barrier of $38.00 on Jul 31, 2013, the higher-end of its Initial Public Offering (IPO) price range, Facebook shares have surged 66.0% over the next 6 months.

Facebook delivered a positive average earnings surprise of 20.7% over the past four quarters. This Zacks Rank #2 (Buy) stock has a market cap of $130.36 billion and a long-term expected earnings growth rate of 30.2%.

Impressive 4th Quarter

Facebook's impressive fourth-quarter results reflected its growing dominance in the mobile advertising market. Mobile ad revenues were $1.25 billion, which comprised 53.0% of ad revenues, up from 49.0% in the previous quarter.

Advertising revenues were driven by increasing mobile engagement, higher number of marketers, continuing investment in new products and robust performance of its newsfeed ads. New products and initiatives such as Internet.org, graph search, Instagram video and Messenger 3.0 helped Facebook achieve significant traction over the last 12 months.

Facebook messenger was among the top most-downloaded applications on Apple 's ( AAPL ) iOS and Google 's ( GOOG ) Android in Dec 2013. Messenger users jumped 70.0% in the fourth quarter. The company launched Instagram for Microsoft 's ( MSFT ) Windows-based smartphones.

Mobile-only Monthly Active Users (MAU) was 296 million at the end of the fourth quarter compared with 157 million in the year-ago quarter and 254 million in the previous quarter. Mobile MAUs surged 39.0% year over year to 945 million. In fiscal 2013, daily users on mobile outnumbered desktop by approximately 200 million.

Moreover, new products such as Instagram Direct and the most-recently launched Paper application are expected to further boost mobile MAUs, going forward.

Estimate Revision

The Zacks Consensus Estimate for the first quarter remained steady at 15 cents over the last 7 days. For fiscal 2014 and 2015, the earnings estimate remained steady at 88 cents and $1.23, respectively, over the same time frame.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AAPL , FB , GOOG , IPO , MSFT

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