Avani Sharma's Contributor Page
Last Updated: July 26, 2020 (Prior to the 2Q2020 earnings release).
View: Bullish
Model Description: This model projects the notion that Facebook will undergo an increase in revenue after taking both the current global pandemic and social tensions into account. With the pandemic causing millions to stay at home, Facebook has witnessed an all-time high of usage as people's inability to go outside has caused them to spend more time on the social media platform. As it can be seen in the model, the Southeast region was in the midst of an increase in MAUs prior to the pandemic and the lockdowns in the Southeast will make certain that YoY growth increases steadily. The YoY growth in ARPU, however, will face a decline due to both the social tensions occurring worldwide and the pandemic as they have left businesses with fewer resources to invest in marketing as heavily as they did prior to the pandemic. This will cause Facebook to lose a large portion of revenue as advertisements had previously been a main source of earnings for the company. It is unlikely that growth in ARPU will increase until after the pandemic is over. Facebook will also be forced to put more of its own time and resources into marketing as more than 750 advertisers are currently boycotting the company for its apathetic response to current social issues.
View: Bullish
Model Description: This model projects the notion that Facebook will undergo an increase in revenue after taking both the current global pandemic and social tensions into account. With the pandemic causing millions to stay at home, Facebook has witnessed an all-time high of usage as people's inability to go outside has caused them to spend more time on the social media platform. As it can be seen in the model, the Southeast region was in the midst of an increase in MAUs prior to the pandemic and the lockdowns in the Southeast will make certain that YoY growth increases steadily. The YoY growth in ARPU, however, will face a decline due to both the social tensions occurring worldwide and the pandemic as they have left businesses with fewer resources to invest in marketing as heavily as they did prior to the pandemic. This will cause Facebook to lose a large portion of revenue as advertisements had previously been a main source of earnings for the company. It is unlikely that growth in ARPU will increase until after the pandemic is over. Facebook will also be forced to put more of its own time and resources into marketing as more than 750 advertisers are currently boycotting the company for its apathetic response to current social issues.
| FB Earnings Model (Avani Sharma).xlsx |
Avani Sharma is an incoming freshman at NYU College of Arts and Sciences studying Global Public Health with a focus in Biology. She is eager to learn how the business world and the health care sectors intersect to improve lives. Avani's interests include reading, playing tennis, and spending time with her dog.
Disclosure: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.
Disclosure: The author of this article/model has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in the content represent the author’s opinions.