Key factors to watch when Facebook (FB) reports Q4 results

Facebook Inc. (NASDAQ: FB) is scheduled to report fourth quarter 2019 earnings results on Wednesday, January 29, after the market closes. Analysts estimate earnings to increase to $2.53 per share from $2.38 per share reported a year earlier. Revenue is projected to grow over 23% to $20.89 billion.

Facebook is a leader in the field of digital advertising and this strength is expected to continue in the fourth quarter as well. Last quarter, advertising revenues increased 28% to $17.3 billion.

Facebook has been diversifying its services and has been investing in areas like video streaming. Investors will be interested in the company’s updates in this area as well as on topics such as its cryptocurrency Libra and political advertising.

As we have witnessed over the past quarters, Facebook continues to see growth in users despite the privacy concerns and negativity it has faced. User growth has been stronger in regions outside the US and Europe. Last quarter, daily active users increased 9% while monthly active users rose 8%.

The social media giant still faces scrutiny on the way it handles its user data and the company continues to invest in improving its privacy features. This has, however, not affected the popularity of the platform significantly.  

In the third quarter of 2019, Facebook beat revenue and earnings estimates. Revenues increased 29% year-over-year to $17.65 billion and EPS rose 20% to $2.12.

Shares of Facebook have gained 45% over the past one year and 15% over the past three months. The stock has a majority rating of Buy and the average price target is $245.74.

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