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Facebook Rises on Strong 1st-Quarter Daily User Growth

- By James Li

Facebook Inc. (FB), a major social media platform, said on Wednesday that daily average user growth for the three months ending March 31 was 8%, in line with analyst estimates. The stock traded at $196.98 at market open on Thursday, up over 6% from the previous close.

The Menlo Park, California-based company reported revenues of $15.077 billion during the three months ending March 2019, up 26% from the prior-year quarter.


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Company continues strong daily user growth with shift to privacy

Facebook CEO Mark Zuckerberg said the company's business "continues to grow." For the quarter, daily average users were 1.56 billion while monthly average users were 2.38 billion, both up 8% from the prior-year quarter. Average revenue per user was $6.42, up 16% from the prior year.

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Zuckerberg said during the earnings call that Facebook expects to shift focus to a "private-centered" platform in the upcoming years. The CEO underscored that although users still wish to share information through public and private channels, they want to focus on the most recent information. Additionally, Zuckerberg and Chief Operating Officer Sheryl Sandberg said the company continues to promote its advertising business. Sandberg said during the call that Facebook introduced two features to promote transparency: the "Why am I seeing this ad?" and "Why am I seeing this post?" features. Such features allow the user to control the posts they view on the social platform.

Company continues having strong financial strength and profitability

GuruFocus ranks Facebook's financial strength and profitability 9 out of 10 on several positive investing signs, which include expanding profit margins, a strong Piotroski F-score of 7 and interest coverage significantly above Ben Graham's required threshold of 5. Facebook's net profit margin is near a 10-year high of 39.60% and outperforms approximately 96% of global competitors.

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Facebook remains one of the most broadly held companies by gurus, with 41 gurus owning shares as of the latest portfolio date. Gurus with large holdings in Facebook include Jim Simons (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio).

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Disclosure: no positions.

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This article first appeared on GuruFocus.