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Cantor Fitzgerald Expects Strong Q3 From Facebook

Courtesy of Benzinga.

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Facebook Inc (NASDAQ: FB) is scheduled to report its third quarter results on Tuesday after market close.

Youssef Squali of Cantor Fitzgerald is expecting Facebook to report $3.1298 billion in revenue, representing a 55.2 percent year-over-year increase. EBITDA is expected to be $2.0234 billion, representing a 64.7 percent margin. The analyst expects Facebook will earn $0.39 per share, a decrease from the $0.42 per share the company reported in the second quarter, but an increase from the $0.25 per share the company earned last year.

Squali estimates Facebook’s monthly average user base will increase 13.4 percent from a year ago to 1.349 billion and the ratio of daily average users to monthly average users (a measurement of engagement) to be 0.630.

Squali expects a 60.4 percent year-over-year increase in ad revenue to $2.8846 billion, representing a deceleration from 67.4 percent growth Facebook reported in the second quarter. The analyst adds that Facebook will see at the minimum a 50 percent growth continuing in fiscal 2015.

Mobile ad revenue contribution is expected to rise to 65.6 percent in the third quarter from 62 percent in the second quarter, totaling $1.894 billion, according to Squali’s estimates. Video ads contribution will be “relatively small” but should have a “more meaningful impact” beginning in the fourth quarter.

Finally, Squali expects payments and other revenue streams to rise 12.4 percent from a year ago to $245.1 million, given management’s main focus remaining on advertising.

Shares are Buy rated with an $82 price target.

Latest Ratings for FB

Date Firm Action From To
Oct 2014 Monness Crespi Hardt Initiates Coverage on Buy
Oct 2014 Shanghai Securities Initiates Coverage on Buy
Oct 2014 Credit Suisse Maintains Outperform

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Cantor Fitzgerlad Facebook Youssef SqualiAnalyst Color Previews Analyst Ratings Trading Ideas

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