Facebook (NASDAQ: FB) shares have advanced last week more than 3% and continue to trade in a bull market. Facebook reported better-than-expected Q4 results this January, and the company expects stable or accelerating growth in the first half of 2021.
Fundamental analysis: Facebook reported better-than-expected Q4 results
Facebook continues to expand its business, and according to the latest news, the company will offer an in-app prompt intended to inform users about Facebook’s personalized ads. Facebook will ask for permission to use data, and in offering the prompt, the company is taking advantage of Apple’s stance that providing education to users about privacy is allowed.
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Facebook reported better-than-expected Q4 results this January; total revenue has increased 33.2% Y/Y to $28.07B while Q4 GAAP EPS was $3.88( beats by $0.68). In the first half of 2021, the company expects stable or accelerating growth, and it will continue to expand capital expenditures.
“At the same time, in the first half of 2021, we will be lapping a period of growth that was negatively impacted by reduced advertising demand during the early stages of the pandemic. As a result, we expect year-over-year growth rates in total revenue to remain stable or modestly accelerate sequentially in the first and second quarters of 2021. In the second half of the year, we will lap periods of increasingly strong growth, which will significantly pressure year-over-year growth rates,” said David M. Wehner, the chief financial officer (CFO) of Facebook.
It is also important to mention that the number of daily active users has increased by 11% in Q4 while the number of monthly active users has increased by 12%. Facebook announced a new $25B share repurchase program in addition to a previous $34B authorization, of which $8.6B remained.
Analyst firms remain positive on Facebook after the Q4 report, KeyBanc raised its price target to $360 from $345 while Jefferies raised its target to $350. Facebook had a strong four-quarter as people and businesses continue to rely on FB services, and the company is likely to sustain double-digit growth in 2021, according to KeyBanc.
Technical analysis: Bulls remain in control of the price action
On this chart, I marked important resistance and support levels. The important support levels are $260 and $240, $300 and $320 represent the resistance levels.
Facebook shares have been moving in an uptrend since the beginning of April, and the technical picture implies that the price may advance again above $300 resistance. If the price jumps above $280, it would be a signal to buy Facebook shares, and we have the open way to $300.
On the other side, if the price falls below $260, it would be a strong “sell” signal, and the next target could be around $250 or even $240.
Facebook reported better-than-expected Q4 results this January, and the company announced a new $25B share repurchase program. The technical picture implies that the price may advance again above $300 resistance and as long the price of Facebook is above $260, this stock remains in the bull market.