Good is Not Quite Good Enough for Facebook (FB) - Nomura
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Nomura Securities analyst Anthony DiClemente commented on Facebook (NASDAQ: FB) following the sell-off following results, which related to good not being good enough.
DiClemente commented, "Facebook delivered 3Q revenue growth in line with estimates, as user growth accelerated and engagement improved, but 3Q did not provide the type of large beat that has characterized the previous three quarters. By contrast, margins came in well ahead of forecast, expanding the most since 2014. Management tempered investor enthusiasm by reiterating its expectation of slowing growth next year, as ad load expansion moderates beginning in 2H17. In addition, management noted that 2017 is likely to prove an investment year on accelerated hiring and infrastructure build out. While decelerating growth dynamics are already incorporated into Street estimates, investor sentiment may grow incrementally more cautious. We essentially maintain our estimates and Target Price which implies 35x 2017 GAAP EPS."
The firm raised FY16E EPS from $4.02 to $4.13; FY17E EPS from $5.18 to $5.23.
The firm maintained a Buy rating and price target of $155.00
Shares of Facebook closed at $127.17 yesterday.
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