Let's Face It, Facebook's Growth Is Decelerating
by Saibus Research
All of Facebook's (FB) stockholders let up a loud, collective cheer that could be heard all the way from San Francisco to Boston in the wake of Facebook's better than expected earnings. While Facebook generated adjusted EPS that was better than anticipated, we believe that some proper perspective should be considered. While the company generated adjusted EPS that was slightly better than anticipated, it was still flat relative to last year. Although the company still enjoys strong adjusted operating margins at 42% as of Q3 2012, operating margins have declined by 9% versus the prior year's comparable quarter. Although Facebook's stock jumped by nearly 25% on October 24th before it settled down with a 19% gain, we believe that Facebook shareholders are not out of the woods quite yet. We believe that part of the reason why Facebook's stock jumped so high after it reported its results is because 15-20% of the company's shares are held by shorts and a good portion of the pop in FB's stock was short-covering. read more »
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