Business

Facebook goes fishing on Wall Street for what it likes

Social media is far from perfect, but it’s a game that wins by comparison, for better or for worse.

Facebook‘NS

FB 1.26%

After the company announced, stock prices rose nearly 2% on Monday. Third-quarter total revenue growth Due to this, it decreased by more than 20 percentage points on a sequential basis.

Apple‘NS

AAPL -0.03%

Recent changes to iOS system Limit user tracking.. The company’s forecast for total revenue growth from the same period last year for the fourth quarter was also about 7 percent below analysts’ forecasts at the midpoint of the guidance range.

Still, following competitor Snap Last week’s earnings report, Facebook photos looked relatively sophisticated. Snapshare has lost more than 27 percent of its value since the company reported a continuous slowdown in revenue growth of nearly 59 percentage points, citing iOS and quoting iOS, the fourth, 20 percentage points below analysts’ expectations. It led to quarterly earnings growth. Change and global supply chain issues.

Following Snap’s report, Facebook’s share fell by more than 5% on Friday. This is the worst day since October last year, outpacing all the daily declines caused by The Wall Street Journal. A series of surveys At the company that started last month.

In particular, Facebook shares were closed on Monday prior to earnings reports, despite new reports from more than 12 news organizations over the past few days on Facebook’s internal documents. The point here is not new.Investors still remain against all the negative coverage of Facebook over the years Seems to prioritize Facebook economic growth.

In that regard, Monday’s report contained some promises. In its earnings announcement, the company announced that it will launch a new reporting segment called “Facebook Reality Labs” in the fourth quarter. According to the company, this new segment will cover its metaverse ambitions, including hardware, software and content related to augmented reality and virtual reality.

Facebook said it expects to reduce overall operating profit in 2021 by about $ 10 billion as a result of investing in new segments.Chief executive officer

Mark Zuckerberg

Facebook’s goal is to reach 1 billion Metaverse and generate hundreds of billions of dollars in digital commerce over the last decade.

At a conference call on Monday, Zuckerberg also pointed out features like Lille, Facebook, and Instagram video-based TikTok as major short-term growth drivers.

Jeffreys analyst Brent Chill said Lille and Shops, the company’s online storefront feature for Facebook and Instagram businesses, could become billions of advertising businesses for the company next year. I presume that there is. He likened the launch of a reel ad to a story ad. Story Ads states that it became the company’s largest impression driver within 18 months of its launch. On a phone call Monday, Zuckerberg said he was optimistic that Lille could be as important to Facebook as the story.

Aside from current advertising headwinds, these are two major sources of revenue for companies that have lost more than $ 140 billion in market value during that period, with stocks declining by more than 13% since mid-September. For big tech investors, such a move causes a wider comparison. Five years ago, Facebook was trading at a premium of 35% on forward revenue, compared to the average multiple of Big Tech’s peers.

Microsoft,

MSFT -0.33%

Apple, Google Parents

alphabet..

Today it is trading at a discount of almost 26% on the same basis.

For investors looking to trade in the scorching tech market, Facebook’s rating alone should deserve a lot of likes.

I heard stock picking leaderboard

Write in Laura Forman laura.forman@wsj.com

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Facebook goes fishing on Wall Street for what it likes

Source link Facebook goes fishing on Wall Street for what it likes

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