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Tuesday, January 26, 2016
Connor Campbell - Market Analyst at Spreadex

Stock of the day 26/01/2016 – Facebook Inc

November saw the social media monolith hit fresh all-time highs of $110.65 off the back of a stellar set of third quarter figures. Besting street estimates Facebook posted revenue of $4.5 billion (against the $4.37 billion forecast), complimented by earnings per share of $0.57 (compared to the $0.52 expected). Beyond those eye-catching figures Facebook saw a 14% jump in monthly active users to a whopping 1.55 billion, with 1.39 billion of those mobile ; the company managed another milestone, crossing the 1 billion daily active users for the first time.

Facebook Inc Chart January 2016
(Source: 26/01/2016)

After hitting those aforementioned all-time highs Facebook plateaued around the $105 mark, finishing 2015 at $104.73. Yet the troublesome trading of 2016 immediately had an effect on the company’s stock, Facebook starting the year at $102.34; by the end of the first week of January Facebook had fallen below $100 for the first time since near the end of October. It sits at a current trading price of $96.83 (, 26/01/2016).

In terms of Facebook’s fourth quarter figures on Wednesday, analysts are analysts are expecting a 39% rise in revenue to $5.36 billion, with the more important ad revenue expected to jump 46% to $5.25 billion. Monthly active user growth, meanwhile, is expected in the region of 13% to 1.58 billion, whilst an improvement in the engagement rate, which has hovered around 65% for the past few quarters, could be a boost. Beyond hard data, any ideas of how lucrative the company’s virtual reality device Oculus Rift could be interesting, as will be any mention of monetising Messenger and what Facebook intends to do with WhatsApp now the $1 fee has been discontinued.

Facebook Inc has a consensus rating of ‘Buy’ with an average target price of $120.83.

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Stock of the day 25/01/2016 - Apple Inc


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