FB Stock Forecast: Why You Should Buy Additional Shares of Facebook

motek 1The FB Stock Forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary:

  • The recent approval of a D.C. federal judge of Facebook’s $5 billion fine is a very compelling reason to buy more FB shares.
  • This $5 billion was the settlement deal that Facebook agreed to pay last year to the U.S. Federal Trade Commission.
  • The U.S. FTC charged Facebook over privacy violations caused by the Cambridge Analytica Scandal.
  • Getting caught and fined for his penchant for violating privacy rules made Mark Zuckerberg smarter.
  • Zuckerberg is already a genius. Anything that makes Zuckerberg smarter further fortifies my high conviction buy rating for Facebook’s stock.

A long-term investor that has above average IQ can comprehend why the recent court approval of Facebook’s (FB) $5 billion settlement offer is a strong buy signal. This $5 billion fine will make the greedy people at the U.S. Federal Trade Commission forget about Facebook’s Cambridge Analytica-related privacy violations. Facebook touts a cash hoard of almost $55 billion and an annual net cash flow of $36.31 billion. Paying the $5 billion fine is a cakewalk for Facebook.

(Source: stockanalysisdotnet)

My takeaway is that this $5 billion fine is a pricey lesson… that only increased the genius-level IQ of Mark Zuckerberg! Going forward, Zuckerberg will now be more careful in his personal data gathering and spying activities. Facebook’s tremendous profitability has always been its insatiable appetite for personal data collection. The root cause of Facebook’s privacy intrusions is easy to comprehend.

The tremendous ascent of FB’s price since 2012 is always because of Facebook’\s crafty gathering of its 2 billion users’ personal data. And online habits. Zuckerberg’s crafty exploitation of collected/collated personal data (gathered from facebook.com, Messenger, Instagram, and WhatsApp) is now why FB is super profitable.

You should add more FB because, despite having been caught repeatedly over privacy issues, Facebook’s net income numbers below never faltered.

(Source:  macrotrends.net)

Why FB is A Strong Buy Before Q1 Earnings

I already discussed last April 1 that the COVID-19 Pandemic was a medium-term tailwind for FB. This gold-chip stock already touts a 1-month return of more than 19%. I won’t fault you if you take your profits now on Facebook. However, I am still highly confident that FB can hit $200 before June ends.

(Source: Seeking Alpha)

The right thing to do now is to hold on to your shares patiently. I expect Facebook’s April 29 Q1 earnings report to confirm my earlier hypothesis that COVID-19 quarantines are boosting ad revenue. A stronger revenue usually leads to better EPS. The consensus estimate for Q1 EPS is $1.76. I have above IQ so I dare say Q1 EPS could go as high as $1.85.

(Source: NASDAQ)

If my supposition proves true on April 29, FB could breach $190 by next week. If I write a bull argument for FB at Seeking Alpha next week, I’m sure my followers will push it to $195 by mid-May. Sad but true, Facebook is one of those companies that are profiteering from the global COVID-19 pandemic. My estimated revenue bet for Q1 is $17.85 billion. Like it or not, FB reporting a beat on EPS and revenue can really seduce many fund managers to rally behind it.

Consequently, I strongly insist that FB remains a strong buy before Q1 earnings. Going forward, FB has a lot going for it that will push it back beyond $200. One of these new future tailwinds is Facebook’s upcoming plan to still put ads on WhatsApp. If you think FB is making too much money right now, wait until ads get pushed to the 1.5 billion users of WhatsApp in 180 countries. My fearless forecast is that ads on WhatsApp could add another $1 billion in annual net income for Facebook.

A current tailwind that could also boost FB toward my price target of $200 is the launch of Messenger Rooms. This new videoconferencing app is Facebook’s equalizer to Zoom. The vulnerabilities of Zoom’s video conferencing app convinced me that Messenger Rooms can quickly disrupt Zoom’s current popularity. Going forward, Messenger Rooms is a secured video app that complements Facebook WorkPlace.  The work-from-home new normal is increasing adoption of WorkPlace.

The WorkPlace became a stronger alternative to Microsoft (MSFT) Teams and Slack with the release of Messenger Rooms.

Conclusion

Buy more FB before earnings. The risk is worth it. We might get disappointed but the higher probability is that Facebook will report Q1 beats. Yes, the stock may dip but it will eventually recover. Mark Zuckerberg has a much higher IQ than all of us. He is the college drop-out god that made us all richer. Let us keep our faith in him.

My super optimism over Facebook is always backed by the reliable wisdom of I Know First. I am highly confident that using AI improves our chances of winning whenever we gamble on the stock market.

fb stock forecast

Past Success With FB Stock Forecast

I Know First has been bullish on FB stock price in a past forecast. On  April 1st, 2020, the I Know First algorithm issued a bullish forecast for FB stock. The algorithm successfully forecasted the movement of Facebook’s shares. In almost one month, Facebook’s shares have risen by 7.41% in line with the I Know First algorithm’s forecast. See the chart below.

fb stock forecast
fb stock forecast

The I Know First has been showing amazing results when forecasting Facebook stock’s trends. As such, their AI algorithm’s high hit-ratio with the Facebook stock forecast has been consistently hitting the trend above 58% times, while the 3-months horizon reached an incredible 95% hit-ratio.

Here at I Know First, our AI-based algorithm has modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing daily stock market predictions, as well as gold predictions, currencies forecasting, and, in particular, Apple stock forecast. Also, we produce articles such as the sector rotating strategy. Today, we are producing daily forecasts for over 10,500 assets. These forecasts generated by our quant trading tool are used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

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Please note-for trading decisions use the most recent forecast.