Facebook (NASDAQ: FB) is scheduled to report its fiscal Q2 2021 results on Wednesday, July 28. We expect FB to beat the consensus estimates for revenues and earnings. The company has reported better than expected revenue and earnings figures in each of the last four quarters. In Q1 2021, the company saw growth in daily active users by 8% y-o-y, while the advertising business revenue grew by 46% y-o-y as the appeal of online advertising continued. We expect the same factors to drive the second-quarter FY2021 results as well.
1) Revenues expected to be ahead of consensus estimates in Q2
Trefis estimates FB’s fiscal Q2 2021 revenues to be around $30.2 billion, 8.5% above the $27.8 billion consensus estimate. FB’s revenues saw growth due to the shift toward e-commerce in the second half of 2020 and the growth continued in the first quarter of 2021. We expect the momentum generated to continue in the second quarter of FY2021. Overall, we expect revenue of around $116.8 billion in FY2021.
2) EPS likely to beat the consensus estimates
FB’s Q2 2021 earnings per share are expected to be $3.08 per Trefis analysis, above the consensus estimate of $3.02. The company is continuously working toward improving margins as witnessed in Q1 2021 where the operating margin was recorded at 43% compared to 33% in the same period of the previous year. Altogether, the company is likely to report an EPS of around $12.58 in FY2021.
3) Stock price estimate 12% above the current market price
Going by our Facebook’s valuation, with an EPS estimate of around $12.58 and a P/E multiple of 31.0x in fiscal 2021, this translates into a price of $390, which is 12% above the current market price of around $349.
Facebook Long (Buy)
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