Facebook: The Social Standard - Initiating Coverage With A $155 Price Target
Altum Research • 97 Comments
Altum Research • 97 Comments
Wed, Jul. 27, 4:07 PM
Tue, Jul. 26, 5:35 PM
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Wed, Apr. 27, 4:27 PM
- Provided its board approves (seems likely), Facebook (NASDAQ:FB) plans to "issue two shares of Class C capital stock as a one-time stock dividend in respect of each outstanding share of our Class A and Class B common stock." The move, which has the same effect on share prices as a 3:1 split, is meant to guarantee Mark Zuckerberg's long-term control of Facebook (Class C shares will be non-voting). Google, Zillow, and Under Armour have taken similar actions.
- Top-line performance: Driving Facebook's Q1 beat: Ad revenue rose 57% Y/Y to $5.2B, a growth rate even with Q4's clip. Payments/other fees revenue (hurt by PC gaming declines) fell 20% to $181M.
- MAUs/DAUs: Monthly active users rose 4% Q/Q and 15% Y/Y to 1.65B. Daily active users rose 5% Q/Q and 16% Y/Y to 1.09B (higher DAU/MAU ratio). Mobile MAUs rose 5% Q/Q and 21% Y/Y to 1.51B. Mobile-only MAUs rose 9% Q/Q and 54% Y/Y to 894M (now 54% of total MAUs). The figures don't include Instagram and WhatsApp users not using Facebook's core services.
- Revenue details: Mobile was 82% of ad revenue vs. 80% in Q4 and 73% a year ago. The U.S./Canada were 50% of ad revenue vs. 51% in Q4. Global ARPU was $3.32, down from $3.73 in Q4 (seasonality) but up from $2.50 a year ago. U.S./Canada ARPU was $12.43, Europe $3.98, Asia-Pac $1.56, and Rest of World $0.91.
- Financials: Non-GAAP costs/expenses rose 41% Y/Y to $2.4B, and GAAP costs/expenses 29% to $3.4B (compares with 52% revenue growth). On a GAAP basis, R&D spend was $1.3B, sales/marketing $826M, and G&A $366M. Non-GAAP op. margin rose to 55% from 52% a year ago.
Capex rose to $1.13B from $502M a year ago. Nonetheless, free cash flow rose 54% to $1.85B. Facebook ended Q1 with $20.6B in cash and no debt.
- FB +7.1% after hours to $116.57. The all-time high is $117.59. Ad partner Kenshoo reported strong Q1 figures ahead of Facebook's earnings. The earnings call starts at 5PM ET (webcast).
- Facebook's Q1 results, earnings release, slides (.pdf)
Wed, Apr. 27, 4:04 PM
Tue, Apr. 26, 5:35 PM
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Thu, Jan. 28, 3:27 PM
- As one would expect, Facebook's (NASDAQ:FB) big Q4 beat has been followed by a flurry of target hikes and plenty of analyst praise. Shares are less than $1.50 removed from a November peak of $110.65.
- "This was a breakout quarter because of Instagram," proclaims RBC's Mark Mahaney. He also notes ad revenue rose 66% excluding forex (it was up 57% in dollars), observes Q4 was the first quarter of Y/Y margin growth since Q2 2014, and says he's unconcerned about 2016 guidance for 45%-55% non-GAAP spending growth (30%-40% GAAP) in light of Facebook's growth trajectory. Mahaney's target has been upped by $30 to $160, with shares declared to be worth $200 in a best-case scenario.
- SunTrust's Bob Peck ($125 target): "We believe ad dollars will follow time spent and that with >1B daily visitors, improving targeting and analytics, new ad units, and >20% of time spent on mobile, Facebook has a long runway. Increasingly investors we speak with are focusing more on the inflection points for FB: Instagram roll-out cadence (now above 400M MAUs); continued video adoption and standalone prospects, new targeting and analytics; ecommerce, and new ad units (DPA and Lead Ads)."
- Rosenblatt's Martin Pyykkonen ($125 target): "We think Facebook has increasing traction with large brand advertisers (more tangible measurement metrics), Instagram and auto-play video ads on the core platform, and early but growing social media advertising market development in earlier stage foreign countries. We estimate Instagram’s global advertising revenue will be >10% of Facebook’s total advertising revenue on a run rate basis by the end of this year and will represent around $1B in advertising revenue for full year 2016 (~5% of Facebook’s total revenue).”
- FBN's Shebly Seyrafi ($135 target): "Instagram taking off like a rocket ship ... [Brand Networks] is forecasting that impressions on Instagram will be over 1B per month by the end of CQ1. This might imply ~2.5B impressions in CQ1, which would be almost double the 1.37B impressions in CQ4 noted above. Instagram [CPM ad prices appear to be] fluctuating around $5-7.”
- In other news, Facebook has announced all U.S. iPhone users are now able to use the company's video livestreaming platform, which competes against Twitter's Periscope. International and Android support will arrive later.
- Prior Facebook coverage
Wed, Jan. 27, 6:03 PM
- Facebook (NASDAQ:FB) has guided on its Q4 earnings call for expenses to rise 30%-40% in 2016. GAAP costs/expenses rose 56% in 2015 to $11.7B; non-GAAP costs/expenses rose 51% to $7.9B.
- The company expects to spend $4B-$4.5B on capex in 2016 (up from 2015's $2.5B and 2014's $1.8B), as it continues aggressively building out its data center footprint. That could be a positive for switch supplier Arista (NYSE:ANET).
- Mark Zuckerberg mentioned WhatsApp ended 2015 with nearly 1B monthly active users, and (thanks to huge autoplay video growth) that over 100M hours of video are now watched daily on Facebook. In what could be a salvo fired at YouTube, Zuck adds Facebook is looking for ways to give users a dedicated place for watching videos (previous). More business communications services are planned for both Messenger and WhatsApp.
- Sheryl Sandberg mentions 98 of Facebook's top 100 advertisers now also advertise on Instagram - Instagram's ad load has surged in recent months. CFO Dave Wehner states ad impressions are up 29% Y/Y, and price per ad 21%.
- Facebook is now at $106.08 after hours. The all-time high is $110.65 (set on Nov. 5).
- Facebook's Q4 results, Q4 details
Wed, Jan. 27, 4:25 PM
- Facebook's (NASDAQ:FB) ad revenue rose 57% Y/Y in Q4 to $5.64B, a sharp acceleration in growth from Q3's 45% and also above Q2's 43%. Payments/other fees revenue (still pressured by PC gaming declines) fell 21% to $204M.
- MAUs/DAUs: Monthly active users +3% Q/Q and +14% Y/Y to 1.59B. Daily active users +3% Q/Q and +17% Y/Y to 1.04B. Mobile MAUs +4% Q/Q and +21% Y/Y to 1.44B. Mobile-only MAUs +13% Q/Q and +56% Y/Y to 823M (52% of total MAUs).
- Revenue details: Mobile was 80% of ad revenue vs. 78% in Q3 and 69% a year ago. North America was 51% of total revenue. Global ARPU rose to $3.73 from $2.81 a year ago. North American ARPU was $13.54, Europe $4.50, Asia-Pac $1.59, Rest of World $1.22.
- Financials: GAAP costs/expenses rose 21% Y/Y to $3.28B - cost of revenue was $824M, R&D $1.31B, sales/marketing $772M, and G&A $371M. Non-GAAP op. margin rose to 60% from 58% a year ago; GAAP op. margin rose to 44% from 29% a year ago. 2015 free cash flow was $6.08B. Facebook ended Q4 with $18.4B in cash and no debt.
- FB +6.3% after hours to $100.38.
- Facebook's Q4 results, earnings release, slides (.pdf)
- Last week: Facebook ad partner reports strong Q4 data
Wed, Jan. 27, 4:08 PM
- Facebook (NASDAQ:FB): Q4 EPS of $0.79 beats by $0.11.
- Revenue of $5.84B (+51.7% Y/Y) beats by $470M.
- Shares +4.9%.
Tue, Jan. 26, 5:35 PM| Tue, Jan. 26, 5:35 PM | 26 Comments
Nov. 4, 2015, 7:53 PM
- Facebook (NASDAQ:FB) now sees over 8B daily videos, Mark Zuckerberg disclosed on the earnings call. That figure is up from 4B in April, and comes as Facebook tests a dedicated video channel and a slew of ad options for its news feed autoplay video ads.
- Other shared stats: Over 925M people use Groups, 500M people are watching video on Facebook daily, 80M photos/day are shared on Instagram, 1B people use Facebook on Android (compares with 1.55B total MAUs), and 1 out of 5 minutes spent by U.S. users on their phones is on Facebook and Instagram.
- Sheryl Sandberg mentioned ad prices rose 61% Y/Y, while ad impressions fell 10% due to the mobile shift (there are no right-column ads on mobile). However, impressions rose 7% Q/Q. Facebook's 45% Y/Y ad revenue growth came in spite of an 8% drop in PC ad revenue. The company's active advertiser count is now above 2.5M, up from 2M in February.
- CFO David Wehner stated 2016 guidance will be provided with Facebook's Q4 report. He also noted the U.S, India, and Brazil are the biggest drivers of DAU growth, and that Facebook is still looking for ways to boost sharing and engagement. A recent GlobalWebIndex survey found (in spite of healthy MAU/DAU growth) only 34% of Facebook users updated their status as of Q3, down from 50% a year earlier.
- Also mentioned: 1) ~1,000 employees were added in Q3, bringing headcount to ~12K (+44% Y/Y). 2) 2015 capex guidance has been narrowed to $2.5B-$2.7B from $2.5B-$3B. 3) When asked about China (where Facebook is often blocked), Zuck called it a "complex situation," while adding Facebook needs to "try to figure out a way forward on that issue." (live blog)
- Facebook is now up to $107.92 after hours, making new highs along the way.
- Facebook's Q3 beat, details
Nov. 4, 2015, 4:37 PM
- Facebook's (NASDAQ:FB) ad revenue rose 45% Y/Y in Q3 to $4.3B, a slight acceleration from Q2's 43% growth. Payments/other fees revenue (hurt by declining PC gaming activity) fell 18% to $202M. Excluding forex (a year-long headwind), ad revenue rose 57% and total revenue 51% (vs. a reported 41%).
- MAUs/DAUs: Monthly active users +4% Q/Q and +14% Y/Y to 1.55B. Daily active users +4% Q/Q and +17% Y/Y to 1.01B. Mobile MAUs +6% Q/Q and +23% Y/Y to 1.39B. Mobile-only MAUs +11% Q/Q and +59% Y/Y to 727M (47% of total MAUs).
- Revenue details: Mobile was 78% of ad revenue vs. 76% in Q2 and 66% a year ago. North America was 50% of revenue. Global ARPU rose to $2.97 from $2.76 in Q2 and $2.40 a year ago. North American ARPU was $10.49, Europe $3.47, Asia-Pac $1.39, Rest of World $0.94.
- Financials: Aggressive investments led non-GAAP costs/expenses to rise 51% Y/Y to $2.09B, which in turn led op. margin to slip to 54% from 57% a year ago. On a GAAP basis, R&D was 28% of revenue, sales/marketing 16%, G&A 8%, and cost of revenue 16%. Capex rose to $780M from $482M a year ago, and free cash flow totaled $1.41B (less than net income of $1.63B). Facebook ended Q3 with $15.8B in cash, and no debt.
- FB +2.2% after hours to $106.23.
- Q3 results, PR, slides (.pdf)
Nov. 4, 2015, 4:04 PM
- Facebook (NASDAQ:FB): Q3 EPS of $0.57 beats by $0.05.
- Revenue of $4.5B (+40.6% Y/Y) beats by $130M.
- Shares +2.7%.
Nov. 3, 2015, 5:35 PM
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Jul. 29, 2015, 7:05 PM
- Facebook's (NASDAQ:FB) annual revenue growth rate - 39% in Q2, 42% in Q1 - will continue declining this year, CFO Dave Wehner forecast on the earnings call. As it is, the Q3 revenue growth consensus is at 35.8%, the 2015 consensus at 37.3%, and the 2016 consensus at 34%. (live blog)
- Wehner also stated Facebook is narrowing its 2015 GAAP cost/expense growth guidance to 55%-60% from 55%-65%. Also, the 2015 capex budget has been cut by $200M to $2.5B-$3B (still up from $1.8B last year).
- Mark Zuckerberg disclosed Facebook now handles over 1.5B searches/day - the company overhauled its search engine in late 2014 - and has indexed over 2T posts. Zuck also mentioned the average Facebook user is spending more than 46 minutes/day on the platform (not counting WhatsApp), and predicted immersive 3D content (read: Oculus) will be the next big thing after video. Over 450M people use Facebook Events, and over 850M use Groups.
- Sheryl Sandberg noted Q2 ad revenue growth would've been 55% Y/Y (rather than the reported 43%) if not for a strong dollar. She offered positive comments on the performance of video ads, Instagram ads, and Facebook's recently-launched Buy button, without sharing many specifics. "We continue to get more than one out of every five minutes on smartphones in the U.S."
- Facebook has dropped to $93.81 AH.
- Q2 results, details
Facebook, Inc. is a social networking service and website. Its website allows people to communicate with their family, friends, and coworkers. The company offers advertisers a combination of reach, relevance, social context, and engagement to enhance the value of their ads. Its services include... More
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