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Facebook’s Guidance Disappoints; Shares Not Yet Cheap

We’re still confident in the firm’s long-term prospects, but we recommend waiting for a wider margin of safety before investing.


Facebook reported slightly mixed second-quarter results with revenue in line with our internal forecast but below consensus. It did beat expectations on the bottom line. 

But Facebook’s guidance on margins trending to the mid-30s during the next couple of years as the company will be investing further in innovation, content creation, and data protection, was disappointing.

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Ali Mogharabi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.