Facebook earnings: Can Instagram beat Snap and keep revenue growing?
When Facebook Inc. announces quarterly earnings Wednesday afternoon, they will be viewed through a new “lens.” One of Facebook’s FB, +0.21% most prominent rivals, Snap Inc. SNAP, -0.99% , went public about a month after Facebook’s last earnings report, giving investors a look inside the Snapchat parent company that Facebook Chief Executive Mark Zuckerberg reportedly tried to buy for $3 billion.
Now, investors will be looking closely at Facebook’s user growth with Snap’s growth in mind, and looking for signs that Instagram is winning or losing in its battle with Snapchat. Facebook has positioned Instagram as a core Snap competitor by launching a feature within that app similar to Snapchat’s popular Stories offering, creatively called “Instagram Stories,” and twice marked user milestones for the app last month.
Can Facebook Beat Sky-High Earnings Expectations?
Facebook Inc (NASDAQ:FB) is bumping its head against all-time highs as it storms toward Wednesday evening’s first-quarter earnings report. Since its initial public offering in May 2012, FB stock has gained nearly 300% to reach a market cap of more than $440 billion.
That makes Facebook the fifth most valuable company in the world, and it also puts FB in the not-so-comfortable situation of having to be able to justify these kinds of returns with ever-impressive financial results despite the company’s increasingly mature business.
Facebook Price-Target Hike Ahead Of Earnings Fueled By Instagram Surge
Facebook (FB) received a price-target hike Tuesday from Deutsche Bank just ahead of first-quarter results, based largely on the rapid growth of Instagram.
Deutsche Bank analyst Lloyd Walmsley raised his price target on Facebook to 180 from 155 and maintained a buy rating.
“We think the rapid growth in monthly active users at Instagram puts the asset on track to be the next $1 billion-plus user product at Facebook and a highly monetizable one at that,” Langan wrote in a research note.
Last week Instagram announced it had reached 700 million monthly users and has doubled in size in the past two years.
“We continue to like Facebook shares, expecting solid first-quarter results and positive call commentary around Instagram, ephemeral content and upbeat trends across engagement and monetization,” Langan wrote.
Thrive Leads Shortcode could not be rendered, please check it in Thrive Leads Section!
On the Tape Today | 5-3-17
LOW | Lowes showing a clean pause after a momentum breakout. (see SPY ETF article below) Also solid relative strength compared to the general stock market. Looking for an $85.75 buy-stop and an initial target @ $91.50. Stop loss on a close below $85.
SLCA | U S Silica continues to exhibit bearish order flow and momentum. Today's sets up a $39.25 sell-stop, looking for minor support in the $36 area. The ultimate target to cover this short position comes in at $32.25. Stop loss on a close above $40.50.
Tape Reading the SPY ETF
SPY ETF continues to produce melted candlesticks. Opening and closing in near the same price shows indecision, lack of institutional commitment.
As you can see on the chart, a meager 57 million shares confirms another light volume day, but… when put in the context of the bigger picture, a light volume pause, you get a little more excited. For the stock market to turn lower, heavier than normal volume must have traded. So far the only heavy volume day we have had recently in the stock market was bullish. (April 24)
$239 clearly show the tipping point for a new momentum move higher. I say momentum and not order flow, because of recent price action. I would love to see a long-term move so we can finally get aggressive with holding positions, but that requires a momentum move first. Remember– > the first momentum move that HOLDS (pauses) implies the start of new order flow.
A stock with a long-term uptrend, BUT trading sideways for 6 weeks is no longer order flow. We need momentum, then pause, then a new momentum move to claim order flow. Why is this so important? Because it sets our trade expectation–how we plan to manage the trade.
Think back to recent trades. I am sure you are pulling your hair out of your head. Trade expectation is low, but you want more. Learn to read the tape and you never get angry. You simply “see “what’s available.”
Trust me, your trading becomes infinitely more enjoyable when you master reading the tape. Don’t fight it, don’t force it, just pay attention. The big picture in the SPY ETF combined with low VIX readings says we should go higher. If we break all-time highs, look to build positions or hold longer, maybe both.
If we trade lower, cash flow only (unless you are trading some oil and gas stocks.
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 5-3-17 | Wednesday Edition
Bullish Momentum: DAL, UAL, LUV, PRGO, GRUB, JWN, ESPR, TRIP, DG, RH
Bearish Momentum: aaqi, mdco, sm, hes, nfx
Long-Term Order Flow
Bullish Order Flow: ADSK, AET, BABA, DLTR, SWKS, AAPL, BA, HD, COST, HON, FB, EW, AMZN, UNH, UNP, WDC, WYNN, STT, TSLA, CC, BIVV
Bearish Order Flow: clr, nfx, slca, oxy, slb, apa, cvx, x, ibm, esrx, tsco,
2X Normal Volume: syf, cvs, emr, twlo, ma, etp, cc
Inside Days: x, wfc, ko, sbux, nwl, ebay, etp, symc, vfc, nflx, uaa, met, vlo, gps, hon , amzn, sti, utx, ccl, gs, lvs, ba, nue, ups, pcln
Become a Better Trader. Get Notified.