In the wake of Facebook Inc (NASDAQ FB)’s earnings report this week, analysts from multiple firms have increased their price targets and estimates. Two of the firms that raised their numbers are FBN and Baird. As always, mobile advertising and engagement rates are hot topics of conversation around the second quarter earnings results.
Shares of Facebook Inc (NASDAQ FB) are holding their own after they shot up on Thursday thanks to the company’s latest earnings report. In a report also dated July 24, 2014, Baird analysts Colin Sebastian and Benjamin C. Gaither increased their price target for Facebook Inc (NASDAQ FB) from $71 to $82 per share and reiterated their Outperform rating.
Their report focused more on strong trends in mobile monetization and also cost controls heading into tougher comparisons for the second half of the year.
Facebook Inc: Facebook Target Revised
In a report dated July 24, 2014, analyst Shebly Seyrafi of FBN Securities said they increased their price target from $85 to $95 per share and reiterated their Outperform rating. The analyst notes Facebook Inc (NASDAQ FB)’s big-time earnings per share and revenue beats. The social network’s advertising revenue growth increased 67% year over year even though it had a difficult comparison compared to last year’s second quarter, which was when the company was ramping up its more expensive News Feed ads.
FBN states that bears who don’t like Facebook Inc (NASDAQ FB) because they think engagement rates are falling may be out of luck. The social network’s overall numbers of daily active users and monthly active users rose to $63% from the previous quarter’s 62.9% increase. Mobile engagement also increased, rising to 61.1% compared to 60.4% in the previous quarter.
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Facebook Inc (NASDAQ FB) Business News
The analysts said Facebook Inc (NASDAQ FB)’s profit margins led the beat in the company’s earnings beat. Revenues were $2.91 billion, while earnings per share were 42 cents. Consensus estimates were $2.8 billion in revenue and earnings of 32 cents per share.
They note that the social network’s ad revenue growth did decelerate but say that it remains “impressive.” Their checks suggest that Facebook (NASDAQ FB) saw “significant” contributions from App Install Ads that boosted its second quarter results. They expect further incremental growth from premium video ads, Instagram, the mobile ad network and global monetization.
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