Facebook shares are soaring on a blowout quarter as the company beat both earnings and revenue estimates, TheStreet TV Rhonda Schaffler reports in the above video.
Updated from 4:23 p.m. EDT
After the market close, the social network reported adjusted earnings that increased to 77 cents per share from 42 cents per share in the year-ago period. The figure topped analysts' estimates for earnings of 62 cents per share, and was 10% better than the highest forecast of 41 Wall Street analysts, according to CNBC.
Revenue increased by 52% year-over-year to $5.38 billion for the most recent quarter, beating analysts' expectations for $5.25 billion.
Facebook's advertising revenue gained by 57% year-over-year to $5.2 billion, with mobile advertising revenue representing roughly 82% of all advertising revenue for the quarter.
Monthly active users grew by 15% year-over-year to 1.65 billion, while daily active users increased by 16% year-over-year to 1.09 billion.
Additionally, Facebook is proposing the creation of new class C shares designed to be nonvoting stock. If approved, Class A shareholders will receive two C shares for each class A share they own, potentially allowing CEO Mark Zuckerberg to sell a portion of his shares while maintaining control of the company.
(Facebook is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here.)
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.
Facebook's strengths such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: FB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.