To say that Facebook Inc (NASDAQ:FB) is a major force is an understatement. Facebook is the Apple Inc. (NASDAQ:AAPL) of social meda.
I’m not even sure if that doesn’t understate it a bit. Maybe some statistics might provide perspective.
Last year during an earnings call, Facebook CEO Mark Zuckerberg stated that the average smartphone user was on Facebook 42 minutes a day, or one out of every five minutes spent on a smartphone.
Facebook now claims 1.44 billion monthly users, up 3.6% quarter over quarter and faster than Q4’s 3.18% growth. That means there are still plenty of people signing up for the service. FB has 936 million daily users, and that number continues to grow as well.
Therefore, anyone who wants to advertise online or on mobile is going to advertise with FB. The fact that ad revenue was up compared to Q1 2014 is not surprising; the surprising thing is it was up 42%. That’s an enormous jump for such a sizable company.
Granted, FB missed earnings in Q1, but that isn’t really the end of the story. Many things during the life of a company are more important than hitting or beating earnings every quarter.
And that’s especially true with a company that would be the largest country in the world if it’s users were citizens. Facebook has quite a diverse customer base and revenue base.
The one thing that makes FB so compelling moving forward is its ability to transition users from desktops and laptops to smartphones, which is the huge pivot that keeps FB ahead of any would-be competition and will drive ad revenues even higher for years to come.
According to TechCrunch, in Q1 Facebook reported 1.25 billion monthly mobile users, up 5%. That was slightly down from last quarter’s 6.2% growth, but that isn’t the most important number.
Daily mobile users are the key, and they were up to 798 million daily (an increase of 7.1%). Plus, the daily-mobile-user growth rate grew from 5.97% last quarter.
Bottom Line
While Facebook continues to add mobile users to its roles, FB is seeing a faster increase in daily users. One quarter doesn’t make a trend, but it’s something that’s well worth watching.
Another interesting takeaway from Facebook’s latest numbers is that fact that 581 million users now only access FB from mobile, up more than 10% quarter over quarter. Younger users and users in developing nations clearly rely more on mobile devices than laptops or desktops for engaging in social media.
And this doesn’t even take into account Facebook’s Instagram, which was up to 400 million users at the end of 2014 according to tech industry news site Re/code. According to the Pew Research Internet Project, half of all Americans ages 18 – 29 were on Instagram in some form or another.
That makes Instagram a great feeder site to Facebook as these young people get older, but it also makes Instagram a compelling platform on its own merit. Also bear in mind that this is the demographic that is wedded to mobile, which is the main force behind Instagram; taking photos on your smartphone sand sharing them with your groups.
So, Facebook missed earnings. Regardless, Facebook has plenty of momentum fundamentally and technically, and therefore, FB remains an A-rated star.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
