We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shares of Facebook dipped 2.26% during regular trading hours Monday as part of a larger market decline, which included fellow tech giants Amazon (AMZN - Free Report) , Netflix (NFLX - Free Report) , and Google (GOOGL - Free Report) . With that said, Facebook stock could jump if the company is able to impress investors with strong Q3 financial results Tuesday.
FB Overview
Facebook, along with fellow social media power Twitter , has come under fire for its role in the spread of misinformation and “fake news.” Both companies have spent more to combat these problems, which should help their platforms remain more attractive to users in the long-run.
Facebook’s commitment to spend more money to secure its platform is expected to show up on its income statement. Last quarter, Facebook said its operating margin is expected to fall to the "mid-30s on a percentage basis" over a more than two-year period. Mark Zuckerberg’s firm posted an operating margin of 44% in Q2, which already marked its lowest level in the past five quarters.
Despite these concerns, Facebook’s Q3 user grow estimates aren’t too bad. More importantly, Facebook’s average revenue per user in the U.S. and Canada—where it made nearly 50% of its revenues last quarter—is projected to soar 43% from $21.20 in the year-ago period to hit $30.31 (also read: User Growth, ARPU & Other Key Q3 Facebook Estimates).
Facebook’s overall Q3 revenues are projected to jump by 33.8% to reach $13.81 billion, based on our current Zacks Consensus Estimate. The other end of the income statement looks less promising. Facebook’s adjusted quarterly earnings are expected to sink 8.2% to touch $1.46 per share.
With that said, we still need to know if Facebook might top our quarterly earnings estimate, as that could help FB stock, especially in the near-term. Luckily, we can turn to our exclusive Earnings ESP figure to do so.
The Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Facebook is currently as a Zacks Rank #3 (Hold) that sports an Earnings ESP of -2.89% Unfortunately, this means that our model is inconclusive. It is, however, worth noting that until last quarter’s $0.01 per share miss, Facebook had topped our quarterly earnings estimates in 11 straight periods.
Facebook is scheduled to release its Q3 financial results after the closing bell on Tuesday.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
What to Expect from Facebook's (FB) Q3 Earnings
Shares of Facebook dipped 2.26% during regular trading hours Monday as part of a larger market decline, which included fellow tech giants Amazon (AMZN - Free Report) , Netflix (NFLX - Free Report) , and Google (GOOGL - Free Report) . With that said, Facebook stock could jump if the company is able to impress investors with strong Q3 financial results Tuesday.
FB Overview
Facebook, along with fellow social media power Twitter , has come under fire for its role in the spread of misinformation and “fake news.” Both companies have spent more to combat these problems, which should help their platforms remain more attractive to users in the long-run.
Facebook’s commitment to spend more money to secure its platform is expected to show up on its income statement. Last quarter, Facebook said its operating margin is expected to fall to the "mid-30s on a percentage basis" over a more than two-year period. Mark Zuckerberg’s firm posted an operating margin of 44% in Q2, which already marked its lowest level in the past five quarters.
Despite these concerns, Facebook’s Q3 user grow estimates aren’t too bad. More importantly, Facebook’s average revenue per user in the U.S. and Canada—where it made nearly 50% of its revenues last quarter—is projected to soar 43% from $21.20 in the year-ago period to hit $30.31 (also read: User Growth, ARPU & Other Key Q3 Facebook Estimates).
Facebook’s overall Q3 revenues are projected to jump by 33.8% to reach $13.81 billion, based on our current Zacks Consensus Estimate. The other end of the income statement looks less promising. Facebook’s adjusted quarterly earnings are expected to sink 8.2% to touch $1.46 per share.
With that said, we still need to know if Facebook might top our quarterly earnings estimate, as that could help FB stock, especially in the near-term. Luckily, we can turn to our exclusive Earnings ESP figure to do so.
The Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Facebook is currently as a Zacks Rank #3 (Hold) that sports an Earnings ESP of -2.89% Unfortunately, this means that our model is inconclusive. It is, however, worth noting that until last quarter’s $0.01 per share miss, Facebook had topped our quarterly earnings estimates in 11 straight periods.
Facebook is scheduled to release its Q3 financial results after the closing bell on Tuesday.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>