Shares
of social networking site Facebook Inc (NASDAQ:FB) were
trading down again on Tuesday as more analyst downgrades make their way into
the market.
The
stock fell to a new low of $17.59, down 2.5 percent with analysts citing the
threat of more share lockup expiry in the short and medium terms.
Similar
to what had happened last Friday Tuesday’s today’s action was also centred on
the threat of the expiration of lockups on
insider share sales,
which began last month.
JP Morgan’s
Doug Anmuth was
the only analyst who retained a bullish
stance on the stock reiterating an Overweight rating though he cut his price
target to $30 from $45, citing the lockups, but urging investors to stay the
course:
Can FB Rebound After The Recent Slump? Find
Out Here
Street
focus remains on heavy lock-up expirations in October and November, but for
those willing to look out a bit further we believe the risk/reward is
attractive with Facebook trading at 7.5x 2014E EBITDA.”
Anmuth
thinks the company’s revenues from
advertisements will pick up this second half of the year, helped by the
company’s “sponsored
stories” format, though he cut his estimates for payment revenue, citing changes in
the nature of online, social gaming, where Zynga Inc(NASDAQ:ZNGA) is
struggling.
“The dynamics around social
gaming have changed, leading to lower monetization for Facebook. Existing and
new Web games now operate in a more competitive space, and users are rapidly
shifting to mobile devices where Apple and Google control app distribution and
payments. Facebook has also yet to develop other Payments verticals beyond
games. We now project a 4% decline in Payments revenue in 2013—flattish
thereafter.”
Anmuth
also raised his ad revenue estimate for this year to $4.14 billion from $4.12
billion, while cutting his payments estimate to $832 million from $869 million,
for a total of $4.97 billion, down from $4.985 billion. That is still better
than the Street consensus of $4.92 billion and 49 cents.
Morgan
Stanley’s Scott Devitt today also reiterated an Overweight rating, but cut his
price target to $32 from $38, citing both risks from rising mobile usage as
well as “declines in user engagement.”
In
a rather mixed note this morning, Pacific Crest’s Evan
Wilson notes that
Facebook is “getting more aggressive with monetization,” but he thinks that
such a development is “more likely a sign of weakness than strength.”
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