Facebook went from loser to stud stock within three months. Wednesday, the social network will see a significant growth in its mobile ad business to keep the eyes of investors are still interested.All on Facebook as it prepares to report fourth-quarter profit, event make-or-break that will whether the social network can continue its remarkable recovery from a coma induced by a stock market initial public offering disastrous.Facebook punching bag Wall Street once, went from zero to hero with its stock price inflation over 60 percent from $ 19 and go more than 31 over the past three months. Even an investor Trailer Search Graph little disappointing to swing upward social network. Today, Facebook, while below its IPO price to $ 38, looks amazingly healthy at $ 31.54.
So what happens now? Wall Street consensus is that the social network will bring in $ 1.52 billion in revenue and earnings per share of $ 0.15. Facebook should miss or clobber the line number above, the stock moves, but Facebook is at stake must show that its treatment more money from its mobile audience growing, other species are really making strategies work and, most importantly, keep the street convinced that his company is on the right track.
Zero to hero in 90 days
In late October, Facebook like a failure. The actions of the social network of trading at about half its IPO price of $ 38. Investors and analysts had no confidence in the ability of the company to take advantage of users who have been rapidly changing their focus from desktops to smartphones and tablets. And there was fear that the end of the year lock-up expirations on suddenly able to see pre-IPO shares would drive the share price down further.When Facebook presented its results for the third quarter, however, the company proved to investors that he was serious about making money, especially on mobile where it has now 604 million monthly active users. Overall, mobile accounted for 14 percent of the advertising revenue from Facebook or approximately $ 152.6 million in the third quarter. At the time, Facebook also said it was $ 3 million per day from so-called Sponsored Stories in News Feed on mobile phones and tablets.
The successes mobile attenuated fear among investors that the motive was a big risk for Facebook - the fear that Wedbush analyst Michael Pachter said was excessive. "I had a goal of $ 35 since July," he said. "I refuse to move."
Ultimately, the foundations of society have not changed in the past 90 days, says Pachter. Instead, the fear disappeared around mobile. CEO Mark Zuckerberg has personally helped drug dose everything-is-A-OK when it stressed the force was on Facebook on mobile.
But now?
Facebook enters the earnings report Wednesday from a position of strength.
The social network successfully mitigated considerable lock-up expirations in October, November, December, adding 1.2 billion shares at the public pool. The company is also now in its seventh month offering Sponsored Stories or updated status brands pay to promote their News Feed stories of members, which means it should be able to show a dramatic growth income from the desktop and mobile-friendly units. Facebook also pushed her Gifts for all members of the United States before the holidays, intensified its efforts to allow developers to plant people on their mobile applications through ads installed app, and began to charge to deliver messages to strangers.
Some of these products can only help each between $ 20 million to $ 100 million in net income in Facebook, Pachter said, but as long as Facebook shows that the percentage of the advertising revenue derived is increasingly mobile, the investors will happy. Pachter predicts that Facebook will bring in 17 percent of advertising revenue in the mobile product markets quarter.RBC fourth identifies what it sees as positive, negative and neutral Facebook in the fourth quarter.
Of course, Wall Street wants to know more about graphics research. Analysts are particularly curious about the potential financial impact of the search tool curator of the exhibition, as shown in pre-release RBC Capital Markets report on Facebook.
They also want to hear about the debacle Instagram Facebook privacy policy and understand if there was a drop measured outside users or business, and they want to be reassured that Facebook will keep spending under control. Facebook should not satisfy the requests in these areas, the company could be in danger of losing some of the ground icts picked up in recent months.
"We continue to love from Facebook and see the company as probably the most under-leveraged name in the Internet sector," said RBC.
The company has identified positive, neutral and negative, as shown above. Basically, Facebook will really bring home the bacon if it can surprise Wall Street with $ 1.54 billion in revenue, earnings per share of more than $ 0.15 over $ 1.25 billion in advertising revenue, and more than 640 million active users per day. However, nothing less than $ 1.52 billion in total revenue and $ 0.14 earnings per share will miss. Financial estimates Facebook RBC dragging position somewhere between the negative and neutral zones.
It is a simple equation for Pachter, who sees in the social network with rose colored glasses....
