Facebook still has plenty of untapped potential that has Wall Street excited. In August, it began taking on TikTok with the newly launched Instagram Reels. And the long-term effort to monetize the massive WhatsApp user base is just getting started.
One key initiative announced early in 2019 has been the integration of Facebook and Messenger with Instagram and WhatsApp. That effort “to let people message across apps” is making strides, CEO Mark Zuckerberg said on the Q3 earnings calls.
“When a small business sets up a shop, they can now establish, or will be able to establish a commercial presence across Facebook, Instagram and WhatsApp all at the same time,” Zuckerberg said.
“Soon, you’ll also be able to click a WhatsApp icon on a Facebook Shop to chat directly with the business,” COO Sheryl Sandberg added.
Facebook announced 2021 capital spending of $21-23 billion, driven by investments in data centers, servers, network infrastructure, and office facilities. Some of the growth vs. an estimated $16 billion reflects delayed construction due to the pandemic. Still, RBC Capital Markets analyst Mark Mahaney wrote that the the implied 31%-44% increase shows Facebook is “investing aggressively in innovation from a position of strength.”
Release of the $300 Quest 2 virtual reality headset should provide a boost to Q4 revenue. “Pre-orders have outpaced the original Quest pre-orders by more than 5x and have surpassed our expectations,” Zuckerberg said.
Facebook has warned that ongoing privacy regulation and changes in mobile operating platforms, notably the Apple iOS 14, could impede ad targeting and weigh on ad pricing. However, Apple delayed the most important change until early next year.
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.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 299.45.
The projected lower bound is: 257.09.
The projected closing price is: 278.27.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 82.3730. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 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 52.81. 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 59 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 59. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 2.220 at 277.810. Volume was 65% below average (consolidating) and Bollinger Bands were 20% narrower than normal.
Open High Low Close Volume 277.390 279.130 274.820 277.810 7,808,426
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 274.43 269.47 232.70 Volatility: 25 49 60 Volume: 13,984,640 19,892,050 24,076,158
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.
FACEBOOK INC A is currently 19.4% above its 200-period moving average and is in an downward 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 bearish on FB.O and have had this outlook for the last 6 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.