Facebook Inc (FB) Likely To Beat Earnings

We expect Facebook Inc (NASDAQ:FB) to beat expectations when it reports fourth quarter 2013 results on Jan 29, 2014. The company posted a 30.8% positive surprise in the last quarter. Moreover, Facebook has posted an average positive earnings surprise of 17.4% over the past four quarters.

Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Facebook is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings Surprise Prediction or ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 9.52%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks #3 Rank (Neutral): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.

The combination of Facebook’s Zacks Rank #3 (Hold) and 9.52% ESP makes us very confident in looking for a positive earnings beat on January 29.

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