Facebook Q4 Earnings Preview
City Index | Jan 28, 2020 05:39
When:
29th January after US market close
Expectations:
Facebook (NASDAQ:FB) had an impressive 2019. Shares jumped 56% as investors cheered the tech giants’ strong revenue and earnings growth. Can Facebook keep growing? Or will coronavirus fears overshadow Facebook earnings.
What to watch:
1. Slowdown in revenue growth - After 29% revenue growth yoy in Q3 and 28% in Q2, CFO David Wehner has cautioned over Q4 warning that a “more pronounced deceleration of revenue growth in Q4” is expected. The consensus estimate is 23%.
2. Monthly Active Users – Despite intense regulatory scrutiny and the negative stories hitting the press, Facebook (NASDAQ:FB) users have not abandoned the platform in any significant way. Monthly Active Users are expected to grow 7%. However, it is worth paying attention to Facebook's’ family metric which aims to de-duplicate users across its services. Has this unique daily user number across Facebook’ group of apps increased in Q4?
3. Guidance – looking ahead Facebook (NASDAQ:FB) expects Q1 EPS to increase by 10% ad revenue by 23%. Investors will be watching for any changes to guidance.
4. Costs – 2020 will be a year of transition and costs will be in focus amid continued investment in safety, security and privacy as Facebook (NASDAQ:FB) comes under regulatory scrutiny. These expenses could rise in 2020 to between $54 billion - $59 billion. This would exceed 2019 costs, expected to be $46 billion - $48 billion.
Chart thought:
The Facebook (NASDAQ:FB) share price reached an all-time high of $222.75 Jan 22nd . The stock trades above its 50, 100 & 200 sma on a bullish chart.
Strong support can be seen at around $205/$203 with the 50 sma, the high (Dec 12th) and support from the ascending trend line. A break through this level could negate the current bullish trend.
On the flip side support can be seen at $222.66 and the all time high $222.75.
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