Facebook Inc FB reported better-than-expected second-quarter numbers on Wednesday. However, shares of the company opened lower on Thursday amid concerns over rising expenses.
Piper Jaffray's Gene Munster was on CNBC to discuss what's weighing on Facebook's stock and his expectations from company's core platform and virtual reality products.
Problems: Expenses And Decelerating Ad Revenue Growth
"There were two things that was said on the call almost at the same time," Munster began. "One was on the expenses; The second was the CFO said that to expect decelerating ad revenue growth, which is what the Street is modeling for anyway and I think he was just trying to temper some expectations."
"So that's what's going on in the expenses and that's probably the decelerating growth - another factor that maybe impacting shares today."
Related Link: Wall Street's Top Pros Dissect Facebook's Earnings
Core Platform And Virtual reality
On Facebook's core platform and Oculus' virtual reality products, Munster said, "They're doing a great job of balancing the core News Feed product which is the product that we all live with and just being slow...It's not coming very fast, but it's working and they're doing great with the numbers."
He continued, "There's another segment that I am very passionate about that I would throw in there too - it's Oculus and I've been on here before and showed version 1, here's version 2 and version 3 comes out in beginning of next year. And it's going to be a profound shift in terms of how I think investors think about Facebook, as crazy as that is, but we are big believers on this whole virtual reality theme."
Engagement
Munster also remarked that Facebook for the first time gave engagement numbers on its platforms and "engagement seems like it's really strong."
At time of publication, Facebook shares were trading lower by 4 percent.
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