Facebook (Nasdaq: FB) stock is up more than 9% in after-hours trading to $58.38 after comfortably beating analysts' expectations when it reported Q4 earnings Wednesday after the close.
The social networking giant posted earnings per share of $0.31, $0.04 better than forecasts. Revenue came in at $2.59 billion, also ahead of the $2.33 billion projected and up 63% year over year.
Mobile ads now account for more than half (53%) of revenue, up from 23% a year ago, and slightly ahead of Wall Street estimates.
What FB stock investors still want are answers to two huge questions...
Facebook (FB) Earnings: Watch the User Count
Multiple news reports have been telling us for months that teens are fleeing Facebook at a rapid rate for rival sites.
Digital consultancy iStrategy Labs released a study midmonth revealing just how many teens have bolted Facebook - and the numbers were ugly.
The social networking site currently has 4,292,080 fewer high-school-aged users and 6,948,848 fewer college-age student users than it did in 2011. That's more than 11 million users who have left in just two years' time.
A recent study from Piper Jaffray found that fewer teens say Facebook is "important to them." Just 23% of teens in the October 2013 study consider Facebook the most important site, a 42% decline from a year earlier.
We know from before how declining user data can weigh on FB shares... Word of teen defections overshadowed Facebook's impressive 2013 third quarter.
Shares originally jumped 15% to $52 after FB's earnings report showed a 60% increase in Q3 sales versus a loss in the same quarter a year ago. But the stock gave back all its gains and more, slipping to $46.50, after Ebersman's teen exodus comments came on the subsequent conference call.
And user count isn't FB investors' only question...
Why Marketers Hate on FB
While Facebook will likely tout its fresh advertising features in attempts to offset its fading popularity among teens, recent reports claim Facebook is "failing marketers."
"[Facebook] focuses too little on the things marketers want most: driving genuine engagement between companies and their customers," analyst Neil Elliot wrote in an open letter to Facebook Chief Executive Officer Mark Zuckerberg. "Your sales materials tease marketers with the promise that you'll help them create such connections. But in reality, you rarely do. Everyone who clicks the like button on a brand's Facebook page volunteers to receive that brand's message - but on average, you only show each brand's posts to 16% of its fans."
Furthermore, studies show 87% of people pay no attention to ads, and 75% say ads on social network sites don't encourage them to make a purchase.
Management's solutions to the user and marketing issues will decide if FB stock can continue its gains in 2014.
Why Facebook Is Failing Marketers
Facebook May Be Losing Its Cool With Teens
More Than 11 Million Young People Have Fled Facebook Since 2011