Facebook Inc ended the last week on a more or less flat note. The last trading session saw the share price moving up by just 0.1%, which was not at all enough to recover a nearly 2% loss for the week overall. There is still some scope for a further fall. However, most analysts think that it does not mean that too many things are going wrong with the firm itself.
Facebook is Rated at 1.21 on the 5-point Scale of Zacks
The Zacks group considered many factors while arriving at this rating, including the potential for growth and figures on the balance sheet. The mean view of 27 brokerages polled by them is that the average target will be $131.074 , based on the stock’s performance in the last six months. During this period, shares of Facebook have gone up by about 8%.
The rating of 1.21 given by Zacks indicates that the overall long-term recommendation is to buy the stock and not to dilute the holdings. The next earnings announcement is expected to be on the 27th of April and analysts are predicting an EPS of $0.44 (which was $0.59 in the previous quarter).
However, growth is definitely happening across all of the portfolio. Facebook’s core social network has now crossed 1.5 bn monthly active users. The companion Messenger app, which was launched in 2014, already has more than 800 mn monthly active users. WhatsApp too reached the 1 bn user mark recently. In fact, even Instagram, which many consider as a social network that is optimized heavily for those having to deal with a lot of photos and videos, has more monthly active users than Twitter.
In the most recent earnings call, Facebook Inc highlighted 4 key points that go behind the growth of every such network. They are: delight, organic brand interactions, scale and monetization. Delight focuses on giving the user an excellent experience in terms of new ways of sharing content. Organic brand interactions involve features such as Facebook Pages, giving brands, music bands, artists, etc. a way of facilitating two-way interactions with fans (unlike ads). Scale and monetization involve taking up the volume of such interactions before trying to construct business opportunities around them.
CEO Mark Zuckerberg in Embarrassing Times
As if the failure of Facebook’s ‘Free basics’ in India wasn’t enough for the firm to suffer a setback, the last week saw Mark trying to distance himself from the offensive comments made against Indians by board member Andreessen. The CEO tried his best to douse the fire.
More recently, Mark and several of his Silicon Valley peers were mocked at by Kanye West (who ironically did it using Twitter). Much like Facebook’s ‘Free basics’ initiative which was looking at bringing people online in developing economies, West expressed his disappointment over prioritizing constructing schools in Africa as something more important than recognizing homegrown artists. What is particularly funny is that West was doing this in order to plead for money and he appealed not only to Mark but also to others such as Larry Page. West even appealed to others to put some pressure on Mark to help him.