Facebook Inc (FB) came into Wednesday’s report on an impressive winning streak. While shares basically traded sideways today ahead of the earnings announcement, FB stock had posted gains of 32.5% over the past year, crushing the 0.5% loss the S&P 500 put up over that same time.
I bet the day traders are wishing they were a little more aggressive after Facebook’s Q1 earnings report Wednesday afternoon.
FB stock immediately jumped about 6% higher in after-hours action after beating consensus views on both revenue and earnings per share.
Zuckerberg Makes FB Stock Owners Happy
CEO Mark Zuckerberg sure knows how to please FB stock owners. The formula is pretty simple, really: Just string together a series of blowout quarters and make your competitors look awful by comparison.
Analysts were expecting Facebook to post non-GAAP EPS of 62 cents per share on revenue of $5.26 billion, up 48.5% year-over-year. Instead, the social networking giant reported EPS of 77 cents on $5.38 billion in revenue. The metrics were up 83% and 52% from a year ago, respectively.
The performance follows a stellar Q4 earnings report from Facebook in late January, when FB stock shot up 15.5%, soaring from $94.45 to $109.11 in a single day.
For a while now, FB stock has been the way to invest in mobile, and that continued to be the case in Q1. Mobile advertising revenue made up a whopping 82% of revenue, up from 73% a year ago.
The site now boasts an incredible 1.65 billion monthly active users (MAUs), up 15% year-over-year. Mobile MAU growth was even more impressive, leaping 21% to 1.51 billion.
Facebook also is considering creating a new class of stock:
“If the proposal is approved, we intend to issue two shares of Class C capital stock as a one-time stock dividend in respect of each outstanding share of our Class A and Class B common stock.”
It would not at all surprise me if FB stock leapt to all-time highs on Thursday. After all, it’s showing once again that it’s best-in-class.
Tech companies have been struggling with reports that have been more or less awful all-around this earnings season. Microsoft Corporation (MSFT), Alphabet Inc (GOOG, GOOGL) International Business Machines (IBM), and most notably Apple Inc. (AAPL) each saw their stocks plunge after Q1 reports that failed to meet expectations.
Facebook’s most direct competitor, Twitter (TWTR), was exceptionally weak, showing user growth of just 3% year-over-year. FB stock deserves to be the go-to investment in tech today, with more than five times the MAUs that Twitter has and a growth rate that’s far more impressive.
When will Facebook stop dominating the competition? I’m not sure, but its Q1 earnings report makes it very clear that it won’t be any time soon.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
