Despite the traditional media sites trying to spin a negative story against Facebook (NASDAQ:FB), users ignored the noise and logged in the site in droves. The activity was so pervasive that the stock rose 12% after reporting a 61% Y/Y rise in earnings in the fourth quarter.
Shares still have ~35% to go before retaking the 52-week high of $218.62. The social networking giant’s dominance in mobile will only attract more advertisers in 2019 and beyond. Mobile advertising made up 93% of ad revenue, compared to 89% last year.
A word of warning: the income line benefited from the effective tax rate falling from 43% last year to just 14% in the most recent period. So, the net income from operations increasing a mere 6% may be a cause for concern.
DAU
Daily active users, or DAU, continued climbing, rising to 1.523 billion. Asia-Pacific and Rest of World accounted for the bulk of the growth. North America and Europe DAU numbers actually fell. This suggests that advertisers are not fully aware that the higher activity will not lead to better reach to the markets it targets.
Still, AP and ROW strength will appeal to advertisers who are targeting the global markets, not just North America.
At a 23 times P/E, the worst could be behind FB shares. Governments may continue to scrutinize security and privacy but users don’t care.
They will just keep coming back to the site and to Instagram, WhatsApp and Facebook Messenger.
Tech Insider
