The social media giant is working on a number of objectives but might not be able to grow more than it has already achieved.
Year 2015 has been an exceptionally good year for Facebook stock. The social media company is one of the companies who will be in the top gainers of the day on the trading session that will be held on Monday. Despite of the fact that many businesses, as per the S&P 500 index, had a disappointing year, it had been amongst the top and best performers of the year.
The year to date stock performance of the social media giant’s stock is at 2% as per the S&P 500 rating but the social media’s stock itself has climbed 45%. Even in the fourth quarter, the performance of Facebook’s stock has been impressive. The stock of the company is up by more than 30% in the current year. The analysts think that it is the perfect time to sell the stock of the dominant social media network.
Investorplace.com believes that Facebook is going to be around for a very long time and even its share price will not be going to zero any time soon but what the analysts believe now is that the social media’s stock is overpriced and overvalued. The trading of the stock if valued at more than 36 times forward while Wall Street is valuing it more than twice at 17.5 forward earnings. After the third quarter, Facebook stock went through its all-time high share price of $110. Since it hit the 52-week high of the share price, the stock of the social media website has been slightly slopping down.
During the previous trading session, the stock price was called off at $105.45, which was quite close to its 50-day moving average of $102.78. In case the stock of the company manages to cross its downward slopping 50-day average, it will be bringing the shares even lower than they already are. In a financial thinking, the investors do need to look at the prospectus as to where the social media company will grow now.
The social media giant already has over 1.5 billion daily active users even if this number increases a little bit it will not be able to bring growth to the company as it will entirely incremental. Furthermore, the less difference that will be made from more users will also be because this number will come from more remote areas. The new users now who will be joining Facebook will be from the less developed with less money in their pocket crowd which would mean less advertisers.
Facebook is trying its best to make advertisements and E-commerce effective on Instagram.
According to Apple Insider it has been reported that Instagram owned by Facebook Inc. has been trying its best to promote itself as a E-Commerce platform. The company is deicing ways through which they can engage the users to do more online shopping through the platform and also wishes to lure more advertisers. The company is performing various experiments where they are collaborating with companies like Apple Inc. to enrich features that bolster their advertisement domain.
A range of new advertisements have amalgamated various features that allow Instagram users to swipe through the wide array of product offerings and advertisement to empower online shopping with 3 dimensional touch and also making payments via services like Apple Pay. According to a source that chose to remain anonymous, the experiment made the by company is simply a test that will allow them promote the platform for E-commerce.
So by playing around with these new set of advertisements, it is assumed that the trend for making transactions through mobile device can also bolster since Instagram is keen about diverting its focus and grow big in terms of online shopping on its app since the Shop Now button has been added to the platform.
Apple earlier launched the iPhone 6S in September 2015, that came up with distinct way to navigate using Force touch abilities. So now take into consideration that Instagram has decided to link this feature with its photo sharing platform, it clearly indicates that the company wishes to target the Apple iPhone 6s users. Moreover, they have also interlinked the Apple Pay services which will allow Apple suers to make payments directly on Instagram with ease. This also indicates that they want to make shopping easier and are focusing on Apple users. There is also a possibility that other company’s might join the list of POS services on the platform soon.
Facebook users on Instagram might have to wait a bit since the company is still experimenting with the app but according to the speculations, the app might just link menus by restaurants to come on the News Feed of users. So gradually the company is devising ways to streamline monetary rewards from the platform.
FB si the industry giant in terms of advertising and now they are trying new ways to come up with something unique that can actually give a tough time to services like Etsy.
Facebook stock closed at $106.49 on Monday November 9.
The social media giant is expected to report a non GAAP EPS of $0.52.
Facebook Inc. turned out to have an earnings report that surprised the analysts in the market, as the social media giant beat all kinds of expectations by a massive difference. However, the media company has been facing some serious lows on the index lately, which is believed to be due to the general loss that is striking all the strong stocks.
The upcoming earnings report of the giant is to be announced in the couple of weeks and analysts think that if the earnings turn out to be towards the positive side, it is possible that the investors in the firm also end up getting bullish about the activities being carried out in the present situation.
The social media giant is all set to make its earnings call on November 4, and analysts think that the giant will be reporting some major growth rates that have taken place during the fiscal quarter. Investors have come around to be a little over the bullish side while looking at Facebook stock but the negativity that has been observed lately has been making them confused about where the media company is actually headed.
Analysts in the stock market have given out an estimated EPS (non-GAAP) of $0.52 to be expected out of Facebook’s earnings whereas the total revenue for the quarter is to come around at $4.36 billion. The expectations have also risen by around 36% where the revenue is concerned and for the EPS, the rise in predicted value is seen to be at 21%.
The increase in the expected revenue and EPS is massively supported by the high investments made by the giant in order to make the marketing of the social media site much better than before.
Currently the social media platform enjoys monthly active users up to 1.51 billion and the rise for the upcoming quarter is expected to come around 1.52 billion which, according to analysts, is a slower growth is compared to the growth in the previous year’s same quarter. As for the daily active users, the numbers are expected to revolve around a number of 865 million for the third quarter of the year.
The social media company has shown great strengths on the index so far and analysts believe this trend will continue for some more time for the giant.
Facebook Inc has carried out a great business from the world of social media and is without argument the largest media giant currently working in the industry. The media firm has been generating high amounts of revenue for quite some time now, and analysts in the industry are constantly looking for weaknesses and strengths that the company can further ride on to maintain its high position in the market. The growth that the social networking giant has been showing for the past couple of years has turned out to be not only commendable, but also very impressive. However, investors in the firm have been raising concerns regarding the long term potential the media company could be showing in the future and where and how it could fall on the stocks.
Analysts, on the other hand, have come out to be highly bullish about the Facebook stock and believe that there is hardly any reason for the investors to worry about the growth the media company has been enjoying for some time as it is expected to go on for some more time now. As for the stocks, the networking company has shown growth at such a fast pace that it has left no space for rivals to stand beside the firm where the revenue generation is concerned. As compared to the last year’s revenue, the current year of the financial calendar saw the social media platform to be making a growth of around 38 percent revenue increase which is not only a surprising factor, but it also shows that under Mark Zuckerberg’s guidance the company is sure to reach some more places in future.
The stock of the company has had the most positive impact by the increasing number of active users and currently, the total number has come around to a colossal 1.49 billion. According to the concerns which are seen to be getting raised by the investors, the fact that at some point in time the networking giant might stop getting more active users is somewhat troubling the investing party. However, it should also be taken into consideration that the tech giant has decided to step into the ad business on the social media which is to raise double the revenue than it is already receiving.
The social media networking industry is working on ad spend worth a massive $25 billion on the current basis, but news suggests that this is going to change into double the amount coming around at $41 billion in the next two years alone.
The analysts believe that despite the increasing growth of the media company, there are a lot of things that have made them downgrade the firm's stock for near term future.
Facebook stock is one of those kinds which repeatedly receive positive comments from analysts. However, recently a research was carried out by a particular firm which ended up showing results in which it did not really prefer the social networking site and declared it as a stock that it did not exactly give preference to. One thing, on the other hand, should be taken into consideration that the same equity firm has shown downgraded Netflix a few weeks back while the company has received many positive upticks from all the other financial firms.Even though Facebook business has shown massive signs of growing more and more in the future, the analysts at Societe Generale seem to be least bothered. The analysts of the firm have granted a rating of ‘sell’ to the media company despite the growth it has been observing lately. The equity firm is of the opinion that very soon the networking giant will be slowing down on the stock index and will start showing bearish signs which is why such a rating has been granted to it. This ‘sell’ rating is being observed by the analysts since the month of January and they have also shown their concerns over how the investors do not seem to agree to their choice of ratings for the social media company’s stock.Societe Generale has also stated reasons why they believe the stock of the social media platform needs to be downgraded. One of those reasons is that the all the other equity firms are feeding on the fact that Facebook’s ad revenue seems to be rather positive on the index given the 73 percent of total cash revenues being earned through mobile advertisement. However, Generale analysts believe that this figure is too early to determine whether the mobile ad system any successful for the firm or not and have declared it to be rather ‘premature’.The analysts have also informed in their research report that Facebook’s active user consumer time has shown a decline from the past two years which is another reason why they believe the popularity of the firm is going to decrease even more in the coming future. Even though the users of the social media are increasing day by day, the analysts of the firm are of the opinion that by the number of social networking apps that are being introduced every now and then, the media company’s popularity is sure to experience a dip. Furthermore, the fact that the social giant bought Whatsapp for such a huge price is being seen by the analysts in quite a negative manner.
