The Next Way Facebook May Upset Wall Street
With those lockups looming and the IPO issues still fresh on many market minds, the stress of a big earnings beat is particularly acute for Zuckerberg & Co.
“While we are not expecting a miss,” Piper Jaffray’s Gene Munster told clients on Tuesday in a research note, “we believe that if Facebook were to miss earnings, the stock would be punished more than a typical earnings miss by a tech company.”
Facebook shares were at $28.60 in early trading on Wednesday, roughly 25 percent below its IPO issue price of $38.
For its part, the company has made important strides since going public in many key areas of business development and in the public eye. It launched an app store in early June, announced a new advertising product called “Ad-Exchange”, quelled critics by appointing its first female director (COO Sheryl Sandberg), and is settled a contentious patent dispute with rival Yahoo!.
As it continues to grow, the opportunities for Facebook to entrench itself as a social leader is not lost on investors — in sum, 31 Wall Street analysts have a median price target on Facebook shares that predict a near 40 percent rally over the next year. That’s if the company can deliver — starting with Thursday’s earnings.
Facebook is due to report second quarter results Thursday after the market close, and will host a conference call with analysts at 5pm ET. It is unclear if CEO Mark Zuckerberg will be on the call.
A Facebook spokesperson declined to comment on the earnings call. Analysts polled by Thomson Reuters are forecasting the company will post a profit of 12 cents per share.