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