Facebook eyes on Ads, as Google did!
Facebook, Inc. is expected to report earnings on Wednesday, 28 July 2021, after market close for the second quarter ending Jun 2021. According to Zacks Investment Research, based on 13 analysts' forecasts, the estimated EPS for this quarter is $3.03. The reported EPS for the same quarter last year was $1.8.
Also, Visible Alpha, as you can see in the below picture, is expecting $2.99 EPS with 2.9B monthly users that can create a total of $27.9B revenue.
The Facebook stock surged after its Q1 FY 2021 earnings that beat analysts' expectations. The company's EPS at $3.30 was much better than $2.37 estimates and rose 92.8% compared to the year-ago quarter. Also, in the first quarter, revenue grew 47.6% to 26.17B, the fastest growth since the first quarter of 2018. The first-quarter company mentioned two main reasons for its quarterly increasing income, increases in the average price per ad and the total number of ads delivered.
The key points that we have to check in the FB earnings report:
1- MAU: Monthly Active Users refers to those registered users that visited the Facebook website or a mobile device or used its Messenger app sometime during the past 30 days of the measurement period. Market expectations are something between 2.1B up to 3.1B in different estimates and research companies.
2- Advertisement: Major income of Facebook revenue, the same as Google, come from selling the advertisement. Always there is a positive correlation between users and advertisement income, as more users mean more places and opportunities to advertise.
3- ARPU: Average Revenue Per User is another crucial point that we have to check. This number is telling us that how much they are making from each user.
The annual average revenue per user has been decreasing in the past years, but in 2020, many people were using online platforms in the quarantine period. In this report, we have to see the reopening effects on this factor; however, reopenings brought many advertisement orders.
Given the reviewed data, analysts currently estimate a rise of 6.0% for MAU, which would be the lowest growth in the past six years. But that would bring the total number of MAUs to approximately 3.0 billion.
From the technical point of view, in most timeframes, it moves in a clear uptrend; however, the market volume decreases, which can signal a possible return in charts. A positive report can put the all-time high ($375) in the spotlight, while a negative earnings report or even adverse reaction to the report can put the stock under pressure and lower levels at 357, 345, and 337 in radars.