Facebook, Inc. (FB): A Look At Earnings Reactions And Report Day Volatility

49 days have passed by since the last earnings report for Facebook, Inc. (NASDAQ:FB) and the new quarterly results look set to arrive in 49 days. The shares of FB at the moment are trading at a volume of 15.36 million, which compares with its normal daily standard volume of 15404271 shares. This has led to the shares of the company declining by -1.37%, currently exchanging hands at $186.17 a share. FB stock has been up by $22.49 (-10.78%) ever since it reached its 52-week high of $208.66 back in July 25, 2019. It has progressed below its 50-day moving average of $188.36 and is up 2.07% over the past week. The stock has retreated -8.4% since the last one arrived so the question here is that will the downbeat trend in that time frame continue leading up to its next earnings release, or is the FB share price due for a breakout?

Facebook, Inc. (FB) Forecasts And Latest Quarter Earnings

Ahead of their fiscal third-quarter to be released on Wednesday, Oct 30, 2019, 38 analysts who are covering the company are estimating that it will record a profit of $1.91 per share, with analysts having different outlooks from $1.69 to $2.15. The current agreed outlook, when compared to the profit recorded last year, is at $1.76 a share, thus an increase of 8.52% is expected. The profit view for a complete financial year for Facebook, Inc. is expected to be around $6.28 in current year, a growth of nearly -17.04% from last year which was $7.57.

Analyzing The Earnings History Of Facebook, Inc. (NASDAQ:FB)

In the past few years, the FB stock has been known to miss the Wall Street’s earnings projection. The company missed 25% of the time, according to the data pulled on their earnings, was able to meet predictions on 0 occasions and topped expectations 9 times. Looking at the past trend, the price of Facebook, Inc. shares had risen following the release of their earnings in 16 of the last 27 quarters.

Looking back, here is how Facebook, Inc. (FB) stock reacted to earnings misses and beats. It gave investors reason to be bullish with the price going down after 1 of the last four earnings reports. The shares of Facebook, Inc. recorded -1.93%, 5.85%, 10.82% and 3.81%, respectively, on the first day of past earnings releases. After a week of earnings reports, the changes were -5.1%, 5.72%, 13.34% and 2.54%. Their post-earnings price movements have resulted in an average increase of 4.64% and an average increase of 4.13% in Facebook, Inc. on next day and 7th day, sequentially. FB’s one month stock performance led to its shares declining by -0.89% with a return of 14.19% witnessed over the last 52 weeks.

Facebook, Inc. (FB) Post Earnings Announcement Drift (PEAD)

Back on July 24, 2019, Facebook, Inc. (NASDAQ:FB) released its Q2 results, in which it recorded EPS of $0.91 that fell short of consensus estimates of $1.88. After the earnings were reported, the price of FB stock kicked off the session at $198.26 and remained in a range of $206.7 to $208.66 on the first day. The shares were priced at $200.71 at the close with a total volume of shares being 39889868.

On April 24, 2019, the Q1 earnings report was disclosed with EPS of $0.85. This was below the estimation of $1.63 per share. The stock price range of FB was between $196.98 and $198.48 on the first-day post announcement, after opening the day at $192.12. The session came to close at $193.26 and there was a total volume of 54148788 shares.

January 30, 2019 was the day when its Q4 results were unveiled. The earnings came in at $2.38, beating the projected $2.19 per share. The very next day, FB stock opened at $165 while staying in a range of $165.6 to $171.68. At the end, it moved to $166.69 a total volume of shares been 77233600.

In the year-ago Q3 earnings on October 30, 2018, the company saw profit per share of $1.76. That was better than the $1.47 analysts had expected. Facebook, Inc. share price started at $148.96 on the first full trading day post-earning and then exchanged hands between $155 and $156.4 throughout the session. The closing price of $151.79 came on the back of 60101252 shares in volume.