Facebook stock price predictions for Q3 ahead of Q2 earnings

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jul 27, 2021
  • Facebook shares are up 1.70% after-hours ahead of fiscal second-quarter results.
  • The stock price slid 1.25% on Tuesday but could open higher on Wednesday.
  • Analysts are upbeat amid improving ad-spend and growing Asia monthly active users (MAUs).

Facebook Inc. (NASDAQ:FB) shares on Tuesday fell 1.25% before surging 1.70% in the after-hours trading. The social media giant reports its fiscal second-quarter results Wednesday after markets close, and analysts are optimistic amid rising ad spend and growing Asia MAUs. 

Analysts see monthly active users soaring to 2.90 billion globally, primarily boosted by Asia MAUs, while daily active users (DAUs) could top 1.91 billion. The rising active user base could grow Facebook’s ad spend, resulting in an EPS growth of more than 68% year-over-year.

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Analysts expect the social networking giant to post EPS of $3.03 for Q2, while the consensus revenue estimate is $27.88 billion, up 49.2% from the same period a year ago.

Should you invest in Facebook shares now?

Although Facebook shares are up nearly 37% this year, the stock could still extend gains amid surging active user numbers. Furthermore, FB shares still trade attractively at a forward P/E ratio of 24.34 despite gaining nearly 60% over the last 12 months.

Analysts expect the social media company’s earnings to grow by 57% this year and at an average annual rate of 23.70% over the next five years. Therefore, Facebook will also continue to attract growth investors in the coming quarters. 

Analysts from Credit Suisse recently reiterated their overweight (buy) rating. They also raised their price target from $400 per share to $480, implying an upside potential of more than 30% based on Tuesday’s closing price of $367.81.

Source – TradingView

Technical overview: Facebook bull run looks poised to continue

Facebook shares bounced back in the after-hours trading to trade closer to current all-time highs of $375.33. 

The stock is still trading closer to overbought conditions in the intraday chart, but optimism ahead of Wednesday’s earnings could push the price even higher.

Therefore, investors can target extended gains at approximately $388.36 or higher at $404.73. The key support levels are $349.10 and $331.85.

Bottom line: the catalyst for buying Facebook shares now

In summary, Facebook shares appear to be trading within a solid bullish trend formation in the intraday chart. And despite FB stock’s 52-week rally of about 60%, the forward P/E ratio still looks attractive to value investors. 

Furthermore, the company’s earnings growth expectations for this year and the next five years will woo high-growth investors. Therefore, Facebook looks like an exciting stock to add to your portfolio in Q3 2021.

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