This is a Video Guest Post by AK of Fallible
In this video we analyze Facebook (FB) and their most recent earnings.
FB reported very strong numbers. It’s still growing revenues at 30%+ and even saw its daily active users (DAU) increase sequentially 1% YoY for the first time since Q1 2018.
The stock jumped more than 10% on the report and is now up roughly 22% since we first bought 4-weeks ago.
The company is coming off a spending binge on security (a much-needed one) and we should see opex level off going forward while the company refocuses on product and monetization; two areas where there are plenty of untapped revenue sources and earnings levers to pull (think Whatsapp and greater Insta monetization).
Facebook is looking to further integrate all of their apps, enable cross-platform encryption, and more deeply embed the ability for brands to directly transact with consumers. There is huge potential here and it seems like Zuckerberg and team are moving towards the WeChat model where they create an internet within the internet where users rarely have reason to leave their platform.
Former PM, Gavin Baker, put out a great thread on FB hitting on all these points and what this means for the company. I suggest giving it a read. Here’s a link: https://twitter.com/bakergavin/status/1091008839518871552
We’ll look to add to our position but will be patient. The stock is currently trading at its upper weekly Bollinger Band which means it’s likely we see a pullback soon. That’ll give us a nice area in which to add.
And as always, stay Fallible out there investors!
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***All content, opinions, and commentary by Fallible is intended for general information and educational purposes only, NOT INVESTMENT ADVICE.
