On Wednesday, November 1, Facebook will testify before two congressional committees on Capitol Hill about how Russia hijacked its platform to meddle with last year’s US election.
And on the same day, back at its Silicon Valley headquarters, Facebook’s top brass will also brief Wall Street about the company’s third-quarter earnings – financial results that most analysts expect to be exceptionally strong.
Whether intentional on Facebook’s part or not, the double-booking highlights the stark divide between the mounting criticism the company faces in the political realm and the seemingly unshakable love it’s enjoying on Wall Street.
While Facebook has suffered a battering of public-relations scandals in recent weeks, from its admission of spreading roughly 3,000 Russia-linked ads that reached 126 million Americans to allowing hateful automated ad-targeting options like “Jew-hater,” the company’s roughly $520 billion public market cap has largely gone unpunished. In fact, the company’s stock is trading at historical highs.
Late last month, Deutsche Bank raised its estimates and price target on Facebook to $220 a share after conducting encouraging check-ins with advertisers. And a few weeks ago, Morgan Stanley said in a research note that Facebook’s stock was “too cheap for its quality and growth.” And Needham recently called the platform a “must buy” for advertisers.
Facebook is expected to generate $9.8 billion in revenue during the third quarter (representing a 40% increase from the year-ago period), according to analyst estimates compiled by Bloomberg. Of the 47 top Wall Street analysts covering the company, just two have a “sell” rating on the stock.
That’s because Facebook, with its 2 billion users, makes more money off digital advertising than any company besides Google. And the lock the two companies have on digital advertising is expected to get even stronger. The research firm eMarketer recently upped its forecast for Google and Facebook’s combined take of the US digital ad market to 63% this year, up from 60% originally expected.
So as Facebook responds to the public backlash over Russian operatives abusing the same ad machine it openly touts as able to sway elections, the company’s business is doing more than OK. It’s booming.