Strong results despite mixed engagement trends
Q4 revenue/EPS comfortably beat consensus, but engagement trends were mixed, with US/Canada DAUs declining and time spent on FB falling ~5%. These trends do create some incremental concern regarding the longer-term opportunity, but appear largely self-inflicted due to algorithm changes, are unlikely to materially impact monetisation in the next couple of years and seem already reflected in valuation given the 21x FY19 GAAP PE based on our raised estimates. We therefore remain O'weight, lifting our YE18 PT to $225 using a 25x GAAP FY19 PE.Facebook is building and engaging products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices. The company's products include: Facebook, which enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, which is a place where people can express themselves through photos, videos, and private messaging, and explore their interests in businesses, creators and communities; Messenger and WhatsApp, which are messaging applications; and Oculus, which connects people through its Oculus virtual reality products.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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