Will Facebook Finally Break Through $200?

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB) is on tap to report Q4 FY2017 earnings along with its full-year FY2017 numbers. Facebook recently breached the $189 level as earnings approached, however it recently sold off from these highs following news that Facebook would overhaul its news feed in favor of “meaningful social interactions” versus “relevant content.” I think this news was timely with the upcoming earnings announcement as Facebook will once again deliver phenomenal growth numbers across the business with beats on both top and bottom lines. Once the growth trajectory is affirmed with EPS moving in lock-step, the stock only becomes cheaper, and thus this pull-back could be a rare buying opportunity before the stock breaking through the $200 barrier. Facebook ended 2017 with a monster return of 53%, however, considering its growth the stock remains relatively cheap with a P/E of 34.8 and PEG of 1.23 implying an annual EPS growth rate of 28.3%. Once the newly designed news feed launches in conjunction with earnings later this month, I think the stock could break through the $200 level imminently. I feel that Facebook represents value even after this massive run through 2017 and I maintain my long thesis with a price target of $230 by the end of 2018.

News Feed Overhaul

Facebook announced major changes are coming to its news feed to prioritize “meaningful social interactions” on the social media’s news feed as opposed “relevant content.” With this reformatting, users will start seeing less public content from businesses or publishers and more posts from their friends. Mark Zuckerburg expects that the time people spend on the social media network will decrease as a result however it will be “more valuable.” Facebook sold-off on the news as investors and analysts regarded this as an overall negative impact on earnings. Facebook sold-off over 5% on the news or $10 per share as analysts weighed in on the new roll-out. Overwhelmingly, analysts remain positive on shares of Facebook with JP Morgan’s Doug Anmuth maintaining his overweight rating and a $230 target price. I feel that the news feed overhaul will be negligible to earnings, especially over the long term. This sell-off is an excellent opportunity to enter the stock before what will likely be a fantastic earnings announcement. Continue reading "Will Facebook Finally Break Through $200?"

Facebook Continues Double-Digit Growth - $200 Soon?

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB) recently announced Q3 FY2017 earnings and once again delivered phenomenal growth numbers across the business with beats on both top and bottom lines with revenue of $10.33 billion and EPS of $1.59 translating into beats of $490 million and $0.31, respectively. Total revenue and net income were up 47% and 79%, respectively. Previously, I authored an article and put forth my thesis that Facebook was the preferred FANG stock, collectively comprised of Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG), considering its growth and valuation relative to its FANG cohort. The Q2 FY2017 earnings reinforced this thesis. Facebook had been on an uptrend heading into earnings and broke through the $182 level.

The stock declined after the earnings call due to talk that the company will increase expenses to beef up its security workforce to combat “abuse on our platforms, ” and as a result, the stock sold off a bit to settle at $179 the next day. The stock has had a tremendous run YTD and is up 55.5%. These numbers may seem staggering, and some may contend that buying at these levels would be cashing the stock. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with technology comparators such as Google, Netflix, and Amazon, collectively known as the FANG stocks, Facebook is far superior with a lower risk profile. Facebook’s projected growth is more significant than Google’s yet has a P/E ratio that’s in-line with Google’s and a fraction of Amazon’s and Netflix’s. I feel that Facebook represents value even after this massive run and I maintain my long thesis. Continue reading "Facebook Continues Double-Digit Growth - $200 Soon?"

Upcoming Facebook Earnings - A Nonevent Long-Term

Noah Kiedrowski - INO.com Contributor - Biotech


Upcoming Earnings

Facebook Inc. (NASDAQ:FB) is due to announce earnings on July 26th after the market closes. Facebook tends to be volatile after earnings are announced and typically pop to the upside as Facebook’s earnings have continued to post robust growth. Back on June 2nd, 2017, I authored an article “Facebook Will Hit $175 By Year End” and with five more months to go before the end of the year, I think Facebook has a good chance of breaking through this number. Facebook has been on an uptrend heading into earnings and currently sits at $160 per share and while the stock is up 39% YTD. These numbers may seem staggering, and some would state that buying at these levels would be cashing the stock. Normally I would agree with this approach. However, I think Facebook is an exception to this situation. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with tech comparators such as Alphabet Inc. (NASDAQ:GOOG), Netflix Inc. (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN), collectively known as the FANG stocks, Facebook is superior with a lower risk profile. Facebook’s projected growth is greater than Google’s and just shy of Amazon’s yet has a P/E ratio that’s lower than Google’s and a fraction of Amazon’s and Netflix’s. Regardless of the upcoming earnings announcement, this will be an immaterial event to the long term narrative for Facebook investors. I feel that Facebook represents value even after this massive run YTD and continue my long thesis. Continue reading "Upcoming Facebook Earnings - A Nonevent Long-Term"

Facebook Will Hit $175 By Year End

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB), Instagram, Messenger and WhatsApp are ubiquitous in this digital age of social, mobile and cloud dominance. Facebook and its properties have dominated the social media landscape posting robust growth in all metrics pertaining to user growth, engagement and monetizing of such metrics, the latter more specifically in the last 3-5 years. Facebook’s earnings growth has been tremendous and has accelerated over the past 4 years. EPS has increased from $0.02 at the end of 2012 to $3.56 at the end of 2016, posting a ~17,500% rise over that period. For a large capitalization company such as Facebook, this growth is very impressive. Judging by the previous 4 quarters, and more specifically its Q1 2017 quarterly results, this growth doesn’t appear to be slowing down anytime soon while steamrolling rivals such as Snapchat (SNAP) in its path of growth (Figure 1). Facebook’s Q1 numbers continue to impress, posting revenue and EPS growth of 49% and 73%, respectively. Facebook doesn’t show any signs of letting up and makes acquisitions to drive the business now with Instagram and WhatsApp and into the future of virtual reality with Oculus. Factoring in its projected growth with tech comparators such as Google (GOOG), Netflix (NFLX) and Amazon (AMZN), I’m predicting that Facebook with hit $175 by the end of the year with a lower P/E ratio than any of the stocks above. If Facebook hits the $175 mark, the stock will still be cheap on a relative basis. My prediction suggests an 18% upside from current levels. Continue reading "Facebook Will Hit $175 By Year End"

The Only Way I Would Play The IPO Market

Matt Thalman - INO.com Contributor - ETFs


With the recently highly hyped Snap Inc. (NYSE:SNAP) initial public offering, I was once again reminded why I don’t attempt to buy into IPO's.

While big name company's first offer their stock to the general public, its call an initial public offering, or an IPO. While there are a number of issue's with buying stocks the first day they start trading, the biggest one is the hype!

The hype surrounding a big name IPO, such as Snap, Facebook, or Twitter to name a few, is that the demand for shares outweighs the supply on the first day of trading. Millions of people want shares and most fear if they don’t get them early, they will miss a big move higher. This hype and fear frenzy often causes shares to skyrocket in the first minutes to hours of trading. Snap for example rose 45% on day one.

But, after the hype fades, so will the stock price. The demand declines to the point that those looking to sell have to be willing to part ways with their precious shares for much less than they sold for on day one. Snap fell 27% on its second day of trading. Continue reading "The Only Way I Would Play The IPO Market"