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Facebook, Inc. (FB) Message Board

  • mashiach@verizon.net mashiach Jul 28, 2013 8:00 AM Flag

    The Mobile-First Strategy Has Paid Off, but the Move Higher Was Overdone

    The Mobile-First Strategy Has Paid Off, but the Move Higher Was Overdone
    By Andrew Keene

    After Facebook announced second-quarter earnings that were above analysts' expectations, the stock surged higher in after-hours trading. Facebook had a lot of skepticism to deal with prior to its earnings report due to the uncertainty of how much revenue the company would receive from its mobile application. However, much of Facebook’s recent success can be attributed to an increase in mobile usage, which grew much faster than expected. With the amount of mobile users expanding by 51% over the last year, the company has gained roughly 41% of its revenue through mobile advertising.

    The new strategy for the social network to be a mobile-first company has clearly paid off. While the company moves forward, it will continue to look for ways to use the mobile device to entice new advertisers. As the number of people logging into Facebook on their phones exceeds the amount of those on a PC, this is a growing marketplace for the company to gain untapped revenue.

    Facebook posted an EPS of $0.19 on revenues of $1.813 billion. This was above the company’s expected earnings per share of $0.14 on revenues of $1.62 billion.

    While the quarterly results were impressive, I believe that the move higher was overdone and that the stock will trade below $30 before it trades above $38. I believe that there will be a lot of profit-taking at this level, and that the change in sentiment is going to be short lived.

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    • This latest surge in buying and volume had to be institutional and funds to yield such volume, these are not fickle get in get out investors. Facebook has established it's mobil seniority and secured its future in mobil advertising the 3rd quarter results will cement the fact and the share price should move north for quite some time.

    • This is also in the same artificial that you posted:

      Facebook Has Legs to Go Much Higher
      Also By Sean Udall

      Facebook has, in my view, produced three good-to-great quarters in a row, not to mention all the years it took to build it before it went public.

      As I said in my last webinar, FB and Google (NASDAQ:GOOG) have the game, the set, and nearly the match. They are number one and two in nearly every online advertising vertical. The rest is left fighting for scraps or figuring out how to do deals with these two companies. Thus, investing and trading in them is about timing, valuation, and technicals, while investing around them for the time being will probably be an exercise in futility (I'm talking the internet space specifically here).

      In fact, the only company right now that I see with the ability to challenge either FB or GOOG in most of their verticals is Apple (NASDAQ:AAPL), because AAPL has the second-largest installed base of connected/paying/engaged users. But time will tell if AAPL chooses to challenge FB and GOOG, though the company is probing a couple of verticals around the edges.

      So why might I buy any FB back or possibly even add to it? Simple: $32.50 is a key breakpoint. And after that level, there is really no resistance until $38 and that is where I'm pretty well convinced the stock will quickly go. Also, FB now isn't about just one good quarter; it's about a string of them, and the smart money has been talking about this along with me. In fact, I think we will now see a lot of big money move into FB from some older, slower growth names. And many growth fund managers now have to add the name. Lastly, given the last quarter, I'd much rather be in FB than GOOG over the course of the next quarter. Then as we get closer to the coming reports, start building GOOG back up and shedding FB around or above that $38 IPO price.

      Bottom line: This was a home-run quarter for FB, but not the first one. The stock is going higher and probably going to do

 
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