Facebook lastest quarter result beats analysts estimates as revenue from mobile ads chalked up 14% of its total revenue.
Yesterday, we see a down bar with massive profit taking. Immense selling pressure was witnessed. FB opens at a high of $24.13 and close at $23.42. Take note of the fierce gapped down some months back. The selling pressure over there has to be tested before FB can challenge analyst TP of >$27.
Future : The worse seems to be over for Facebook, but do not buy into impulse as well. Waiting for better indicatiors....
Download link to their reports : https://hotfile.com/list/2114430/7207caa
Excerpts from some research reports that I saw:
From Nomura Securities :
From JPM:
Yesterday, we see a down bar with massive profit taking. Immense selling pressure was witnessed. FB opens at a high of $24.13 and close at $23.42. Take note of the fierce gapped down some months back. The selling pressure over there has to be tested before FB can challenge analyst TP of >$27.
Future : The worse seems to be over for Facebook, but do not buy into impulse as well. Waiting for better indicatiors....
Download link to their reports : https://hotfile.com/list/2114430/7207caa
From Nomura Securities :
Like GOOG, the shift toward mobile was front and center, as 14% of
FB’s 3Q ad revenue came from mobile….up from 0% in February when
FB initially started testing mobile sponsored stories. While this
~$152mn in quarterly mobile ad revenue is still small compared to
Google’s ~$2bn, note it is not materially different from a total
“desktop/mobile ad mix perspectiveFrom JPM:
Investment Thesis
We believe Facebook’s virtual ownership of the social graph, strong competitive
moat, and focus on the user experience position the company to significantly
improve monetization over time and to become an enduring, blue-chip company built
for the long term. Facebook’s massive reach and engagement continue to drive
network effects and its targeting abilities provide significant value to advertisers,
though it is still early. We believe Facebook’s ad platform is just beginning to shift
toward more social ads with higher quality formats, and it will become increasingly
valuable to advertisers.
Valuation
Our $28 price target is based on ~15x our 2014 EBITDA estimate of $3.9B and is at
the low end of the range of high growth Internet comps such as Amazon (14x 2014E
EBITDA) and LinkedIn (25x 2014E EBITDA).
Risks to Rating and Price Target
Downside risks include:
1) significant lock-up expirations though year-end 2012
could bring considerable supply of shares; 2) user-first mentality could create shortterm
revenue risk and volatility; 3) rapid shift toward mobile usage ahead of mobile
monetization efforts; 4) advertiser ROI on Facebook may remain difficult to
measure; 5) privacy, security, and regulatory risks; and 6) dual-class share structure
and Mark Zuckerberg’s control.
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