Facebook Stock Rose 7% Last Week; Fiscal 2017 Expectations

Facebook Stock

Facebook started this year on a very positive tone with its shares closed up 2.74 percent or $123.41. This translates to a rise of 7.27 percent from its last week’s close of $115.05. Facebook shares around October was down about 15 percent from their 52-week high are now only 7 percent below that low.

Facebook has warned in its third quarter that capital expenses will increase in upcoming quarters and will be reporting its fourth quarter and fiscal 2016 performance in just a few weeks. Wall Street expects Facebook to report earnings of $1.30 per share on revenue of $8.47 billion, signifying a year-over-year growth of 64 percent and 45 percent.

Victor Anthony, an analyst for Aegis Capital initiated coverage on Facebook stock with a Buy rating and issued a $150 price target. He noted strength in properties such as Instagram and Messenger. "On the revenue side, we see user growth, advertiser demand, time spent, live video, video ads, better ad targeting, and Instagram helping to offset the lack of ad load growth," Anthony said.

Facebook is expected to earn $5.18 per share for fiscal 2017. While this estimation implies year-over-year growth of 21 percent, t has been lowered by 3 cents in just a period of the last seven days. The expected rise in Facebook’s capital spending is one of the major reasons of this happening and has also put some pressure on its stock. According to Anthony, "Facebook has typically guided costs aggressively, only to come in below those estimates."

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