Facebook (NASDAQ:FB) Monetizing Messaging

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Facebook
Ticker: NASDAQ:FB
Price: $287.52

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Facebook’s best effort to monetize its messaging apps has been through its WhatsApp Business. The app has quickly amassed 50 million users and has potential for a lot more. The app is mainly monetized through an API that allows other applications, like Kustomer, to connect with the WhatsApp messaging system. 

Kustomer takes that effort a step further by helping customer service teams manage their entire customer relationship across multiple social media platforms and communication channels. Facebook plans to continue supporting all communication channels on Kustomer.

Facebook’s other efforts to monetize messaging are less direct. It’s building more and more social commerce tools, including catalogs and payments in WhatsApp and Facebook Shops. Those tools position Facebook to do everything for a business from customer acquisition to sale, and with the addition of Kustomer, it can foster those customer relationships providing customer support and producing repeat sales.

“We want businesses of all sizes and across all industries to discover the value of messaging,” Dan Levy, VP of Ads and Business Products, and Matt Idema, COO, WhatsApp wrote in a press release. To that end, Facebook has a long way to go. It says 175 million users contact companies through WhatsApp daily. But WhatsApp has over 2 billion monthly active users. Meanwhile, WhatsApp Business’s 50 million users represent a tiny portion of the 200 million businesses across Facebook’s platforms.

The more reasons and ways Facebook can provide businesses to connect with customers on messaging, the more adoption it will see. And some of those tools will invariably present themselves with monetization potential.

Business Summary

Facebook continues to confront election rated censorship controversies. However, it remains a staple in technology and a blue-chip stock with enticing upside.

Our AI systems rated Facebook C in Technicals, B in Growth, B in Low Volatility Momentum, and B in Quality Value. The stock closed down 6.31% to $263.11 on volume of 47,299,002 vs its 10-day price average of $274.26 and its 22-day price average of $269.78, and is up 25.42% for the year.

Revenue grew by 11.71% in the last fiscal year and grew by 94.27% over the last three fiscal years, Operating Income grew by 19.88% in the last fiscal year and grew by 42.33% over the last three fiscal years, EPS grew by 36.52% in the last fiscal year and grew by 62.85% over the last three fiscal years.

Revenue was $70697.0M in the last fiscal year compared to $40653.0M three years ago, Operating Income was $23986.0M in the last fiscal year compared to $20203.0M three years ago, EPS was $6.43 in the last fiscal year compared to $5.39 three years ago, and ROE was 19.96% in the last year compared to 23.86% three years ago.

Forward 12M Revenue is expected to grow by 16.71% over the next 12 months, and the stock is trading with a Forward 12M P/E of 26.3.

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 309.42.

The projected lower bound is: 266.93.

The projected closing price is: 288.18.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 82.3336. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 59.42. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 62 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 0.970 at 287.520. Volume was 23% below average (neutral) and Bollinger Bands were 31% narrower than normal.

Open     High     Low      Close      Volume
285.360  291.780  280.825  287.520    17,361,624
Technical Outlook
Short Term:        Overbought
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period     50-period     200-period
Close:           276.44        271.39        233.71
Volatility:      29            49            60
Volume:          15,626,852    19,326,044    24,157,788

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FACEBOOK INC A is currently 23.0% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future.

Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 0 periods.

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