Facebook, Inc. (NASDAQ:FB) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$21b, some 8.5% above estimates, and statutory earnings per share (EPS) coming in at US$2.71, 42% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Facebook from 46 analysts is for revenues of US$102.4b in 2021 which, if met, would be a substantial 30% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 16% to US$10.30. Before this earnings report, the analysts had been forecasting revenues of US$99.6b and earnings per share (EPS) of US$10.21 in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.
The analysts increased their price target 6.2% to US$313, perhaps signalling that higher revenues are a strong leading indicator for Facebook's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Facebook at US$350 per share, while the most bearish prices it at US$120. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 30%, in line with its 29% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% next year. So it's pretty clear that Facebook is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Facebook going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Facebook Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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