It’s all about revenue growth and mobile advertising for Facebook (FB), which according to consensus estimates, is expected to post 37% year-over-year sales growth for the second-quarter.
“When we think about a growth company, it seems to us like a lot of people don’t think Facebook is as ‘growthy’ as maybe it really is,” says Scott Kessler, head of technology research at S&P Capital IQ, in the attached video. “We’ve seen accelerating growth, we expect that to continue, and so it’s really important to focus on what they actually deliver.”
Analysts are expecting the social network to report a Q2 profit of $0.14 a share on revenues of $1.62 billion. Factset shows that among the 37 analysts covering the stock, 72% rate it a buy or overweight, 28% rate it a hold, with no sell or underweight ratings. The average price target is $32.75.
That’s not too bad for the company everyone loved to hate after its botched IPO in May 2012. Remember, shares debuted at $38 a piece. At that time, 53% of analysts had buy ratings, 27% hold, and 20% sell.
In the last year, the valuation has come down and sales have gone up. They acquired Instagram, attempted to dip into the smartphone market, and aggressively tested new ad strategies.
“I think the company should really be commended for the fact that a little more than a year ago they had zero revenues from mobile and now they are at a run rate of $1.5 billion a year,” says Kessler, who has a buy rating and $33 price target on FB.Read More »from Facebook: It’s All About Growth & Mobile for Bullish Analysts