Ahead of its Q3 2021 earnings release on October 25, Wall Street focus has locked in on Facebook (FB). The controversial social media titan, which is no stranger to the limelight, not only called for revenue growth to slow in upcoming quarters during its previous earnings release, but is also contending with the very real threat of Capitol Hill’s intervention.
According to the company’s second quarter earnings report, “In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth… We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter.”
Further complicating matters, the Securities and Exchange Commission (SEC) received complaints from whistleblower Frances Haugen. She alleged that Facebook’s own research about the platform fails to line up with public statements made by company executives, including CEO Mark Zuckerberg. Leaking thousands of internal documents, Haugen testified before the U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Data Security on October 5.
Monness analyst Brian White noted, “We found Ms. Haugen highly credible and we believe she provided Congress with more ammunition in their pursuit of not only reigning in Facebook, but Big Tech at large. Moreover, we would not be surprised if she inspires other tech whistleblowers to come forward.”
So, what does all of this mean for Facebook? Using TipRanks’ Website Traffic tool, which analyzes website traffic volume data provided by Semrush (SEMR), we wanted to see where the social networking name stands ahead of its Q3 print.
Here’s what we uncovered:
Diving deeper into the data, investors can expect Facebook to report encouraging website traffic figures. In the third quarter of 2020, the number of total unique visitors on all devices from its family of domains, which comes in at 6.8 billion, increased 12.28%.
What about the year-to-date change? Comparing the number of total unique visitors to Facebook’s website from January 2020 – September 2020, to the number from January 2021 – September 2021, we see a gain of 13.81%. (See Facebook’s website traffic on TipRanks)
Breaking Down User Geography
To gather further insights from the website traffic data, it is essential that we evaluate the data by region.
Facebook users can be found in almost every corner of the world, with the U.S. accounting for the largest share of total user traffic for September, at 27.6%. Meanwhile, 7.1% of the total number of visits came from users in India.
How does this traffic data stack up to the previous year’s data? Year-over-year, U.S. total unique visitors slipped 2.24%, while global non-U.S. unique visitors surged 17.31%
Wall Street Weighs In
Overall, White remains optimistic on Facebook’s long-term growth prospects. However, he warns that there are risks that must be considered.
“We believe Facebook will fundamentally benefit from improved ad spending and capitalize on accelerated digital transformation with new initiatives; however, we expect the stock to remain hostage to the negative news flow created by this whistleblower that could lead to another round of platform modifications, including dialing down engagement algorithms, and increasing spending on safety,” White explained.
Turning to the rest of the Street, Facebook has a Strong Buy consensus rating, based on 27 Buys, 5 Holds and 1 Sell assigned in the last three months. At $422.88, the average Facebook price target implies 30.2% upside potential.
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