Facebook Share Price: Facebook Downgrades, What Now for the Social Networking Giant?

Facebook Inc (NASDAQ:FB)Facebook Share Price: It was not that long ago when it appeared that Facebook Inc (NASDAQ:FB) shares were making a comeback. After a slow start, things were looking up. And then came the company’s fourth quarter results on January 30. Since then, the situation with Facebook shares has been anything but on solid ground.

Since the company’s fourth quarter results were released, there have been a handful of downgrades.

As noted by the Los Angeles Times, Facebook Inc (NASDAQ:FB) stock is struggling to regain its footing.

“The stock has tumbled 11% since then. It’s off 3% to $27.47 on Tuesday after BTIG analyst Richard Greenfield cut his rating and set a price target of $22.”

Forbes has the rundown on what Greenfield has to say about this decision:

“We upgraded Facebook to Neutral in late November 2012 because we believed advertising revenues were set to notably exceed investor expectations, as we saw Facebook pushing a significantly higher ad load into users’ mobile news feed during Q4 2012.”

“Since then, expectations for Facebook have risen notably, the company reported Q4 2012 revenues slightly above our estimates and talked to significantly higher than expected cost growth in 2013 impacting margins. While we are raising our revenue forecasts for 2013-2015, we are below consensus, especially in 2014, and our adjusted EBITDA estimates are even further below consensus. With revenue and EBTIDA growth set to disappoint, we believe a Sell rating is now warranted.”

With all this in mind, you may be wondering what Facebook Inc (NASDAQ:FB) must do to get back in the good graces of those on Wall Street. While there is no definitive answer, Greenfield shares more insight:

“Simplistically, with a Facebook app on your phone with push notifications, consumers end up touching Facebook far more often as they transition to mobile usage. Yet, the question Facebook has yet to answer is how mobile is affecting aggregate engagement, meaning total time spent on a monthly basis. We suspect the more consumers shift to mobile, the less total time they are spending with Facebook. While the CPMs on mobile are significantly higher (you have to stare at the ads which are quite large relative to the screen size), we struggle to believe Facebook can continue to ramp the ad load on mobile the way they did in Q4 2012.”

That pretty much says it all. Once again, Facebook Inc (NASDAQ:FB) is being forced to prove that its mobile strategy has the ability to pay off in the long run.

What are your thoughts on where FB shares are headed? Do you agree with the decision of BTIG analyst Richard Greenfield to cut his rating?

Check back here for more updates on Facebook Share Price.

DISCLOSURE: I have no positions in any stock mentioned.

For more Facebook news, visit the following pages;

Facebook Gets Upgrade, $38 Price Target from Raymond James

Facebook Beats Earnings Guess, But No Analyst Consensus

3 Tech Companies, 1 Destination

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!