Neither the growing threat of Apple Inc. as its main competitor, nor a violent pandemic could derail the revenue train that is Facebook Inc. And Snap Inc. and Twitter Inc. are benefiting from Thursday’s strong trade .
Facebook FB,
on Wednesday it surpassed Wall Street estimates with a 33% increase in sales, to $ 28.07 billion, and profit of $ 11.22 billion, or $ 3.88 per share. As expected, advertising was responsible for the vast majority of Facebook sales, but “other revenue”, such as Oculus VR headsets and Portal video chat devices, shot 156% to $ 885 million.
“[Facebook] The 4Q20 results exceeded across the board, as [advertising] revenue increased + 31% y / y, helped by a [advertising] recovery and extended vacation; [management] expects the 1Q to remain stable or ‘accelerate modestly’, ”said Cowen analyst John Blackledge, in a note on Wednesday that maintained a higher performance rating and raised Facebook’s target price from $ 340 to US $ 350.
UBS analyst Eric Sheridan supported this view, raising his Facebook target price from $ 330 to $ 350, citing “going out of 20 with a bang” in a note on Thursday.
“The involvement of the entire app family is very impressive,” said Jefferies analyst Brent Thill, in a note on Wednesday that maintains a purchase rating and a $ 330 price target. He highlighted 2.6 billions of people active daily across the Facebook portfolio versus 3.3 billion people active monthly, suggesting that 79% use a Facebook service daily.
Facebook shares rose 1% to $ 274.55 in Thursday’s early afternoon trading. Last year, they increased 31%, while the S&P 500 SPX index,
advanced 16%.
The explosive holiday quarter appears to have benefited not only Facebook, but also its social media brothers. Evercore ISI analyst Kevin Rippey expects Snap SNAP,
to post between 65% and 70% revenue growth when reporting results on February 4. A strong fourth quarter, he said, accelerates Snap’s path to more than $ 10 billion in revenue by 2025.
Emphasizing its destination on Snap, Wells Fargo raised its target price from $ 44 to $ 62.
Snap shares rose 11% in early afternoon trading.
Meanwhile, KeyBanc Capital Markets analysts Justin Patterson and Sergio Sugura updated Twitter TWTR,
overweight the sector’s weight and set a target price of $ 65 in a note to customers on Wednesday. They noted the company’s “growth pains that are coming to an end”.
Twitter shares rose 7.5% in early afternoon trading.
Still, not everything is looking good for Facebook towards 2021.
“We see more and more Apple AAPL,
as one of our biggest competitors, ”Facebook CEO Mark Zuckerberg warned in a conference call with analysts after the earnings news. And CFO David Wehner warned that the company faces “more significant headwinds in ad targeting in 2021. This includes the impact of platform changes, particularly [Apple] iOS 14, as well as the evolving regulatory landscape. ”
Read more: Facebook exceeds expectations, but warns of ‘cross-currents’ in 2021
Baird Equity Partners analyst Colin Sebastian resumed the course of the warnings in a note on Wednesday, in which he assigned a top performance rating and a target price of $ 310.
“Management seemed cautious, as expected, about the difficult comparisons of Y / Y growth in 2H21, and the potential negative impact of data privacy / headwinds on iOS 14,” said Sebastian in a note to customers. “In addition, slowing user growth in some important markets means that revenue growth will depend more on the frequency of use / time spent and / or higher ad prices (increasing ARPU).”