Why Facebook Stock fell today



What happened

Actions of Facebook (NASDAQ: FB) fell 3.9% on Tuesday, after the social media giant’s third-quarter earnings release.

So what

Facebook’s revenue jumped 33% year-over-year to $ 29 billion, thanks to continued growth in its core digital advertising business. Those gains, however, fell short of Wall Street’s expectations for nearly $ 29.6 billion in revenue.

Facebook’s monthly active users of 2.91 billion and average revenue per user of $ 10 are also below consensus estimates of 2.93 billion and $ 10.15.

Following the decline in earnings, Facebook shares may be approaching a buy point. Image source: Getty Images.

Yet Facebook remains extremely profitable. Its operating profit jumped 30% to $ 10.4 billion. And its earnings per share of $ 3.22 is actually higher than analysts’ estimate of $ 3.19.

Now what

Investors fear Facebook will struggle to navigate Applethe new privacy restrictions of, which undermined its ability to target advertisements to its customers. Facebook has offered somewhat discreet advice to address these challenges. Management expects sales of $ 31.5 billion to $ 34 billion in the fourth quarter, while analysts’ forecasts predicted sales of $ 34.8 billion.

Additionally, Facebook faces a maelstrom of criticism and scrutiny from regulators after numerous reports that the company failed to properly address disinformation, hate speech and other disturbing behavior on its businesses. Site (s.

Yet these concerns are arguably already reflected in Facebook’s stock price. The social media titan’s shares can currently be held at less than 20 times its projected earnings for 2022 – a relative boon compared to many other growth stocks.

Facebook apparently thinks its action is a buy. The company has increased its share buyback program by $ 50 billion.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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