Facebook Earnings Review: What Wall Street Thinks

Tickers in this article: FB

NEW YORK ( TheStreet) -- Facebook's second-quarter earnings focused on mobile revenue. Shares were soaring in premarket trading Thursday as Wall Street raised price targets and upgraded shares.

The Menlo Park, Calif.-based social networker earned 19 cents a share on $1.813 billion in revenue for the quarter, as mobile advertising revenue accounted for 41% of advertising revenue this quarter. Total advertising revenue was $1.6 billion, 88% of total revenue, and up 61% year over year.

Analysts surveyed by Thomson Reuters were expecting Facebook to earn 14 cents a share on $1.62 billion in revenue for the quarter.

The company ended the quarter with 1.15 billion monthly active users (MAUs), up 21% year over year. There was a 51% annual increase in mobile MAUs, which drove the strength in mobile revenue. Daily active users (DAUs) were 699 million, up 27% annually.

Following the earnings, many analysts were bullish, with several upgrading shares and raising price targets. Here's what some analysts on Wall Street had to say:

JPMorgan analyst Doug Anmuth (Overweight, $44 PT)

"Facebook delivered its strongest quarter yet as a public company--results that we think could be thesis-changing for many--and we would continue to buy Facebook shares even after the ~17% move up in the after-market. Our revenue and nonGAAP EPS estimates increase 12% and 38% for 2013, and 22% and 46% for 2014."

Topeka Capital Markets analyst Victor Anthony (Buy, $40 PT)

"Facebook needed to, and delivered, a blowout quarter. What is clear from the results is advertisers have validated Facebook as an advertising platform. For full year 2013, our revenue and Adj. EPS increases to $7.196B and $0.71, resp, from $6.733B and $0.63. We still see more upside for the stock and recommend purchase. There are several well defined catalysts over the next two years that should lead to further share price appreciation, including: 1) monetizing Instagram, which, per CEO Zuckerberg, will generate "a lot of profits", 2) launch of auto-play video ads, 3) monetizing Graph Search, 4) a bigger push into e-commerce, and 5) the potential for S&P 500 inclusion. Further, only 1mm or 6% of FB's 18mm potential advertisers are buying ads, implying a huge runway for advertiser uptake exists."

Sterne Agee analyst Arvind Bhatia (Buy, $37 PT)

"We are incrementally bullish on FB's prospects following 2Q results and believe the stock should be a core holding in Internet portfolios. 2Q's highlight was Mobile advertising (+76% q/q versus consensus +20%). Overall revenue (53% y/y) and EBITDA (+57% y/y) accelerated from 1Q's 38%/35% revenue/EBITDA growth. Better than expected user engagement, strong monetization and good cost control helped FB outperform even the most bullish expectations on the Street. Reiterating Buy."

Oppenheimer analyst Jason Helfstein (Outperform, $36 PT)

"Following materially better than expected 2Q results, we are increasing our estimates and price target, and are reiterating our Outperform rating. 2Q upside was driven by higher advertiser demand for newsfeed, both on volume and price, and since mobile Newsfeed pricing is similar to desktop and advertisers are largely indifferent between mobile and desktop, revenues are tracking the consumer shift to smartphones. We believe this dynamic is an important differentiator vs. other ad-supported internet companies, that are being hurt by the mobile mix shift. As such, we are increasing '13E and '14E revenue by 3% and 5%, and non-GAAP EPS by 7% and 9%, respectively. Raising target to $36 from $32."