Facebook Inc (NASDAQ:FB) reported its third-quarter results on Wednesday which showed the company smashing through expected earnings as the company’s $1.59 earnings per share were well above the $1.28 that was expected by analysts.
Revenues of $10.3 billion increased 47% from a year ago and beat expectations of $9.84 billion. Facebook also reported 2.07 billion monthly active users during the quarter, which also beat estimates of 2.06 billion.
The one challenge the popular social media website faces is how it will be able prevent fake news, and how that could impact the company’s operations. CEO Mark Zuckerberg claimed that focusing on security will definitely have an impact on the company’s bottom line, stating that "We're serious about preventing abuse on our platforms. We're investing so much in security that it will impact our profitability."
The question for investors is how much of an impact the security changes will have on the company’s financials, and whether they could hurt sales as well.
The company’s share price is already trading at a 52-week high and these earnings will only send the stock soaring even higher. The share price has climbed 58% year-to-date and its two-digit price to earnings multiple might seem like a bargain compared to stocks like Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASADAQ:NFLX) which trade at more than 200 times their earnings.
Although Facebook has already seen tremendous growth over the years, there is no reason to expect that to slow down anytime soon, especially as the company continues to add to its offerings.
