This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook's Mobile Monster: What Wall Street's Thinking (Update 2)

Updated from 9:52 a.m. EST to include thoughts from Topeka Capital Markets analyst.

NEW YORK (TheStreet) -- If there were any concerns about Facebook's (FB - Get Report) mobile advertising revenue, those concerns can be put to bed.

Faceboook reported fourth-quarter earnings that surged past Wall Street estimates, as the world's largest social network earned 31 cents a share on $2.59 billion in sales. Facebook is now firmly an advertising giant, with revenue from ads surging 76% year over year to $2.34 billion. Perhaps even more impressive is the fact that Facebook's mobile ad revenue now generates over $1 billion in revenue per quarter ($1.24 billion this past quarter), despite having only just become a part of the company's business some 8 quarters ago.

Analysts surveyed by Thomson Reuters were looking for 27 cents a share on $2.33 billion in revenue.

Facebook shares were surging in early Thursday trading, gaining 15.9% to $62.05.

FB ChartFB data by YCharts

The Menlo Park, Calif.-based social network was exceptionally confident regarding the results and the future, as CEO Mark Zuckerberg talked about the company's long-term plans on the conference call. "Our plan is to continue focusing on improving quality, since we think this is the best way for us to improve the experience for people on Facebook, returns for advertisers, and our own revenue, as well as achieving our long term goal of providing ads that are as relevant as organic content," Zuckerberg said on the call.

Zuckerberg also said 2014 will be a year for new and engaging mobile experiences. We've already seen some of that, as the company unveiled Paper this morning, "a new app that helps you explore and share stories from friends and the world around you."

Facebook ended the quarter with 1.23 billion monthly active users (MAUs) and with more than 757 million daily active users (DAUs), up 22% year over year. Though the company did not address concerns about teens fleeing the service, CFO David Ebersman noted photo sharing social network Instagram, which the company owns, has seen its user base double over the past year. Facebook ended the quarter with 945 million MAUs, including 556 million DAUs, up 49% year over year.

Analysts by and large were supremely positive on the quarter, with several raising price targets sharply. Here's what a few analysts had to say:

JPMorgan analyst Doug Anmuth (Overweight, $80 PT)

"Facebook reported strong 4Q revenue growth along with significant improvement in margin as advertiser demand for social ads continues to build. The company delivered revenue and EBITDA 10% and 20% above our estimates and concerns about what Facebook would say on teen engagement, ad load increases, and opex growth did not play out."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FB $116.40 -0.28%
AAPL $93.22 -1.70%
GOOG $691.70 0.10%
TSLA $238.00 -3.90%
YHOO $36.38 -0.57%


Chart of I:DJI
DOW 17,711.01 -119.75 -0.67%
S&P 500 2,056.42 -19.39 -0.93%
NASDAQ 4,762.94 -42.3510 -0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs