Investing In Socal Networking Earnings Growth

Shares of social media giant Facebook (FB – Trend Report) have been in focus over the last few weeks as worries over a hot stock bubble have dominated the market. In fact, during an especially rough stretch from mid-March to mid-April, FB tumbled by nearly 20%, putting extra pressure on the firm to give investors some good news at earnings season. 

FB did not disappoint with its first quarter results though, as the firm easily beat the Zacks Consensus Estimate of 18 cents a share on Wednesday, posting EPS of 25 cents. Revenues were also impressive, as FB posted $2.51 billion in revenues, a 72.2% increase from the year ago quarter. 

The really impressive part of the earnings report was Facebook’s continued surge in the increasingly-important mobile sphere. Mobile ad revenues were $1.3 billion, and were close to 60% of the total ad revenues, showcasing just how far FB has come in mobile in a very short time frame. 

Outlook 

Clearly, Facebook has figured out mobile in a big way which is huge for their near term outlook as mobile monthly active users soared 34% year-over-year to just over one billion. And since Facebook already has users’ likes, dislikes, and preferences, there is hope that Facebook can be a key stop for mobile advertisers seeking targeted audiences. 

Thanks to this, some investors are starting to feel a bit better about FB stock in the near term, especially as the price continues to tumble, making FB an intriguing choice at these levels and especially so considering its growth rate projections. In fact, current figures have FB earnings growth at over 67% year-over-year for this year, and nearly 41% for next year. 

Estimates have also been trending higher as of late, as readings for the current year have grown from 88 cents a share 90 days ago to $1.01/share today. Meanwhile, for the next year time frame, estimates have moved from $1.22/share 90 days ago to their current level at $1.42/share.