Facebook (NASDAQ:FB) Advertising Growth Shows Surprising Strength

Facebook (NASDAQ:FB) Advertising Growth Shows Surprising Strength

$FB #Facebook #USA #Nasdaq #SocialMedia #Stocks #Trading

Facebook
Ticker: NASDAQ:FB
Price: $234.50

Company News

Facebook shares catapulted to an all-time high in after-hours trading today after the social media giant posted significantly better-than-expected earnings for the second quarter of 2020.

The company reported net income of $5.18 billion, or $1.80 a share, compared with net income of $2.62 billion, or 91 cents a share, in the year-ago quarter. Revenue improved 11% to $18.69 billion from $16.89 billion a year ago. Analysts surveyed by FactSet had expected adjusted earnings of $1.39 a share on sales of $17.34 billion.

Monthly active users, or MAU, a key indicator of Facebook’s growth and advertising appeal, improved to 2.7 billion. FactSet analysts had projected 2.63 billion, up 8.8% from the 2.41 billion reported a year ago. Daily active users, or DAU, rose 12% to 1.79 billion, while analysts expected 1.75 billion.

The better-than-forecast report shows advertisers were willing to boost budgets in the second quarter after holding off earlier in the year. Profit doubled to $5.18 billion, or $1.80 a share, beating the $1.39 per-share average estimate. Because of Facebook’s vast reach and the rise in usage during the pandemic, the company’s results have been able to withstand a broader economic slowdown better than many other large companies.

Most of Facebook’s advertising revenue comes from small and medium-sized businesses that have few other options to reach customers. But not all advertisers are happy with the Facebook option. In the current quarter, Facebook is confronting an advertiser boycott, after civil rights leaders called on major brands to protest the company’s handling of harmful content and misinformation. More than 1,000 advertisers, from Verizon Communications Inc. to Coca-Cola Co., pulled promotions from Facebook starting in July.

Business Summary

Facebook, Inc. is focused on building products that enable people to connect and share through mobile devices, personal computers and other surfaces.

The Company’s products include Facebook, Instagram, Messenger, WhatsApp and Oculus. Facebook enables people to connect, share, discover and communicate with each other on mobile devices and personal computers.

Instagram enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends.

Messenger allows communicating with people and businesses alike across a range of platforms and devices.

WhatsApp Messenger is a messaging application that is used by people around the world and is available on a range of mobile platforms. Its Oculus virtual reality technology and content platform offers products that allow people to enter an interactive environment to play games, consume content and connect with others.

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 250.85.

The projected lower bound is: 218.86.

The projected closing price is: 234.85.

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 31 white candles and 19 black candles for a net of 12 white candles.

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 44.0153. This is not an overbought or oversold reading. 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 49.15. 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 45 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 -75. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 10 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 1.210 at 234.500. Volume was 17% below average (neutral) and Bollinger Bands were 49% narrower than normal.

Open     High     Low      Close      Volume
230.220  234.893  229.000  234.500    20,615,306
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bearish
Long Term:         Bullish
Moving Averages: 10-period      50-period       200-period
Close:           236.38         234.44          204.51
Volatility:      27             44              53
Volume:          17,549,664     25,303,526      20,634,424

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 14.7% 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 4 periods.

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