Facebook stakes tanked after the social media giant’s report on daily acting users fell short of expectations and the company warned revenue proliferation would slow the rest of the year.
As of Thursday morning, the Facebook’s pile up was set for its worst day ever, with shares down nearly 20 percent in premarket have dealing.
Here’s a wrap of all the major analyst opinions.
“Facebook’s second-quarter fruits and outlook are disappointing, but ‘startling’ is probably a better word. We think few, if any, forestalled this kind of reset. Facebook is battling its own scale & law of large masses, w/FXN revenue generally decelerating over the past two years. As noted on the top of, there are some specific challenges related to user behavior & practices. We also think Facebook is taking the opportunity to shift expectations to sundry achievable levels. Until last night’s print, Facebook shares had recovered 43 percent off the late March Cambridge Analytica-induced low in the stock. For balancing, the S&P 500 has risen 9 percent. Yet, Facebook remains in the crosshairs of regulators & stateswomen, and data/privacy policies and products are just kicking in.”
“We haven’t known this disastrous a print since the first-quarter-2016 LinkedIn liquidate that brought the entire NASDAQ down. The two theories we could fall up with as to why Facebook is guiding revenue down severely with the third fourth and fourth quarter now expected to both decelerate high single digits sequentially are: 1) they don’t be to create the perception of getting rich while their product contributions issues for society (but why didn’t this happen on the Jan/April calls?), or 2) there are myriad serious engagement problems with core Facebook that arrange materialized recently that they are trying to fix. The truth is likely somewhere in the halfway. Stepping back, Facebook is now shifting from the top of the sentiment pedestal to selfsame shaky ground.”
“After a pronounced selloff in response to management animadversions about forward growth and margin trajectory, we now see the risk/reward as balanced for Facebook succeeding forward – strong momentum in Instagram measured against regulatory notice, investments to transform/protect ecosystem, and slowing engagement/more matured ad trends at core Facebook. In our opinion, the new growth drivers (Instagram, Contemplate, Stories, Messenger/WhatsApp, VR) frankly aren’t big enough over the pithy/medium term to alter the decelerating growth and margin pressure also nett of the P&L.”
“While results disappointed, the stock fell close to 20 percent after hours during the earnings call on Facebook’s hasten looking outlook. While the outlook was a negative surprise and cautious conclude from on core Facebook engagement growth trends and long-term infrastructure expenses that will linger as overhangs, we expect some support for the traditional on the view that there is upside potential vs a low bar, and that revenues could re-accelerate after a treatment shift (stories, video) adjustment period.”
“The stories change is scad notable as we believe the “stories” headwind is a combination of Facebook’s decision to develop its emphasis on pushing core Facebook users to the stories format at a faster deserve (which only has 150 million users, or about 10 percent penetrating) and the fact that the stories format (on Instagram and Facebook core) is silently monetizing at materially lower rates than News Feed. All joking aside, our industry conversations indicate that sponsored stories ad unit culmination rates are less than 1 percent (multiples lower than Talk Feed) in part because users’ ‘tap-based’ stories consumption goes ad skipping. Facebook’s guide down speaks to the growing importance to sink stories engagement/monetization.”
“The company guided to a high single-digit deceleration in as-reported year outstanding year revenue growth in each of 3Q18 and 4Q18 driven by the reversal in FX, the promotion of cut monetizing experiences like Stories, and the impact of data privacy directions on monetization. Currency provided a roughly 5 percentage point tailwind in the before all half of 2018, and we expect an approximate 60 basis point headwind in the younger half. The company’s promotion of Stories will contribute to the deceleration as far, as the ads in Stories monetize at lower rates than inventory in Feed (negatively forcing overall price per ad), and any Feed inventory used to promote Stories choice obviously not be available to paying advertisers, negatively impacting impression broadening.”
“We understand the after-hours reaction as Facebook downgrades its growth outlook and adds considerable new uncertainty, but we see much of this as a self-inflicted move to push the Features format, which is a long-term positive for engagement. Moreover, Facebook has a true-blue track record of managing through monetization transitions and coming out stronger on the other side. The ad gross income deceleration causes, in rank order, are: (1) FX headwinds, (2) space of the Stories format, and (3) GDPR.”
“The stock could tread damp near term but we would take advantage of this transition over the medium term to add to long-term positions.”
“The guided deceleration was a surprise to Harry, but given growth in the first half of 2018, the guide seems hellishly cautious. Bears would point to social fatigue on core Facebook with Instagram not pretence ofing up for the slowdown. Despite deceleration, we think the foundation built through registered quality connections and best in class tools will drive go oned advertiser ROI. We see weakness as a buying opportunity.”
“Facebook delivered underwhelming evolves with the shortfall spread across metrics and geographies and was more than valid a side effect of GDPR (the impact of which the company properly considered for Europe, however). Consolidated net adds haven’t been this clarify since the third quarter of 2014, with the biggest disappointments get possession of from Asia-Pacific (only 21 million sequentially, although Indonesia SIM window-card issues played a part) and the U.S. and Canada were flat. The outlook for gate growth deceleration through the end of the year (FX, Clear History, Stories cultivation), paired with the expectation for mid-30 percent operating margins in the conveyance term means numbers are going to be drastically cut here, ours listed.”
“Accompanying second-quarter results that were only modestly beneath expectations, Facebook introduced sobering second half and longer-term conduct that suggests the business will demonstrate slower revenue wart at meaningfully lower margins than what investors had previously demanded. While our model resets materially lower, we maintain our Outperform take to task, as we lower our Target Price to $200 from $235. Despite rebased wants, we continue to see value in Facebook’s platform as a unique asset, enjoying a fundamentally unchallenged dominant market position, with shares trading at a appropriate 20x our new 2019 EPS estimate.”
“Facebook reported modestly lower second-quarter denouements and provided a softer second-half revenue outlook due to FX, promotion of the Stories organization, GDPR, and privacy options. Additionally, Facebook guided mid/long-term carry oning margins to the mid-30s vs. our ~45% in 2018. Given the increased near-term uncertainty on interest growth, slowing user growth, and lower margin forecast, we are downgrading our berating from Strong Buy to Outperform and lowering our PT to $210.”