What To Expect From Facebook’s Q4 Results

As Facebook (NASDAQ:FB) reports its Q4 earnings on January 30, the investor community will be eagerly watching for signs that either validate or negate the various doomsday scenarios painted for the company in light of recent controversies. As we noted earlier, while Facebook may be flirting with its fair value in the near term, longer-term the company may have some upside. The company’s Q4 earnings could give some indications regarding the outlook for 2019 and beyond.

We currently have a price estimate of $170 per share for Facebook, which is around 20% higher than the current market price. Our interactive dashboard on Facebook’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation.

The amount of negative publicity generated by privacy scandals may have hurt the company’s stock price of late, but Facebook’s underlying business still remains strong – as the company continues to grow its MAU and DAU base. Despite concerns raised around the ROI effectiveness and reporting issues, ultimately advertisers also flock to the largest audience set. The combination of these factors is likely to ensure that its ad pricing remains strong.

In addition to Instagram crossing a billion users, changes of privacy policies at WhatsApp should also likely give Facebook additional targeting firepower. While there has been some noise around the potential liabilities that Facebook faces, given the company’s massive cash piles any fines are likely to be a relative drop in the bucket.

In addition to the MAU growth, in the upcoming Q4 results, we will be listening in for cues regarding usage behavior, advertiser sentiment, updates on the integration of Facebook platform with WhatsApp and the proposed launch of WhatsApp payments in India.

Do not agree with our forecast? Create your own price forecast for Facebook by changing the base inputs (blue dots) on our interactive dashboard.