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Wednesday, April 23, 2014

$FB into earnings

Some expectations for Facebook. 

The growth pattern is predicated on past performance. 

From a longerterm perspective the trajectory looks solid.

The revenue growth is predicated on a gradual increase in global digital ad share, in relation to emarketer's forecast.
Fundies look solid, except when we look at revenue in relation to market capitalization.

Facebook currently has a $160 market cap, while becoming a mature digital ad play, with a very very high multiple. Much of the revenue growth from 2015-2018 is predicated on market share gain, but if this is not seen, revenue growth will decline hard.  Similar to what Google is currently seeing. And like Google, facebook looks to have gotten a bit destracted considering their recent M&As.

Currently waiting for Facebook to hit their consolidation phase, and it may have started coming off its high.

Waiting for the mid-to-low 40s. (This maybe delayed if PC ad rates remain elevated as mobile rates keep rising.)

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