Facebook, the largest social media platform globally, posted its strongest 1st-quarter earnings yet Wednesday afternoon, shattering Wall Street’s expectations. It happens because of the mounting advertising revenue instead of sharp competition from the likes of Google, the world’s largest search giant, and threats on the regulatory front.
Menlo Park reported Facebook’s revenue of around $26.1 billion in the 1st quarter, forty-eight percent greater than the $17.7 billion it pulled in the 2020 first quarter and almost $3 billion greater than the expectations of the analysts.
One of my favorite stocks for the long term just announced their largest earnings ever.
Facebook earns 26 Billion USD in Q1 of 2021. This beats their 17.7 Billion USD in Q1 of 2020. pic.twitter.com/QyayHlksLe
— marvin germo (@marvingermo) April 29, 2021
The net income of Facebook also shattered expectations, hitting $9.5 billion, or $3.30 per share – more than average analyst expectations of $2.33 each share and almost double income of $4.9 billion in 2020 first quarter.
The monthly active users of Facebook soared almost fifty million, such as a record-breaking 2.85 billion users used the social network in the last month of the quarter. A batch of analysts upped the price targets of Facebook this week in expectation of the beyond expectations earnings report, with Stephen Ju of Credit Suisse on Monday saying improving advertisement trends should divine well for Instagram and Facebook’s bottom lines.
The social media giant stock futures soared seven percent within some minutes of the announcement. Furthermore, its shares ended up around 1.2% on Wednesday and mounted around fourteen percent for the year – better than the eleven percent increase of tech-heavy Nasdaq.
Expectations for Facebook Shares in 2022
According to the Bloomberg statistics, analysts thinks that shares of social media platform can go over $341.50 the next year. Additionally, it gives the stock about eleven percent upside to the 28th April closing price of $307. The 3rd-quarter earnings call of Facebook is at 05:00 pm EDT Wednesday. The CEO and founder of Facebook, Mark Zuckerberg, said that the company had a strong quarter as it helped people stay connected and businesses grow.
Further, he adds that the firm will continue to invest aggressively to deliver expressive and new experiences for some years to come, including in novel areas such as virtual and augmented reality, creator economy, and commerce. A Group of Harvard College classmates, including Mark Zuckerberg, founded Facebook in 2004 along with fellow billionaire Dustin Moskovitz.
The social media agency is now the United States fifth-largest firm by market cap, worth a stunning $862 billion. Over ninety-five percent of the firm’s revenue comes from advertisement, with almost fifty percent of sales soaked in America and Canada. However, the Bank of America expects the stock to climb another twenty percent in the upcoming three years; the major risks to watch include drops in user activity, big-tech regulation, privacy concerns, and any adverse impact on advertising prices.