This story was originally published here.
Although I believe that digital advertising, in general, will continue to beat the expectations of bears, I think that Facebook (NASDAQ:FB) still has multiple, negative, company-level catalysts. As a result, I recommend that investors avoid FB stock ahead of the company’s first-quarter results which are due to be reported after the market closes.
On April 21, Facebook’s rival, Snap (NYSE:SNAP), the owner of social media website Snapchat reported earnings per share that were in-line with analysts’ average estimate. But the company’s revenue beat the mean outlook, and its overall Q1 results likely came in well above bears’ expectations.
Further, the Snap’s user base surged 20% year-over-year last quarter, and its revenue jumped 25% YOY in March. Even in the initial few weeks of April, its sales increased 15% YOY. Snap’s stock surged nearly 40% on the results.
Similarly, Roku (NASDAQ:ROKU) stock surged after the streaming TV platform operator reported preliminary Q1 results on Apr. 13. Its active accounts jumped by 3 million in Q1, and its streaming hours soared 49% YOY.
As I wrote in an April 17 column on Roku, “the company raised its first-quarter revenue guidance range to between $307 million and $317 million, versus its previous forecast of $300 million to $310 million.”
In my March 27 article on Roku, I predicted that TV viewership would surge tremendously. I added that worries about ad revenue were exaggerated because some sectors of the economy, such as supermarkets, were “booming.”
Better Investments Than FB Stock
Among the other companies that are doing very well are Amazon (NASDAQ:AMZN), Domino’s (NYSE:DPZ), Netflix (NASDAQ:NFLX), eBay (NASDAQ:EBAY), Walmart (NYSE:WMT), car insurance companies, and video-game makers such as Activision (NASDAQ:ATVI) and Take-Two (NASDAQ:TTWO).
One factor that could be helping these companies is the fact that most of the nation’s highest earners haven’t lost their jobs. That’s because multiple sectors — including tech, finance, healthcare and government — that tend to pay their employees the most haven’t been hurt much by the coronavirus crisis and the recession.
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He’s put together a presentation with the full details which you can view right here.
