FB - Facebook: Strong Q4 Mid-Teens Annualized Return Ahead; Buy

• We review FB's Q4 2020 results released overnight; shares were down 10% at one point in post-market trading, and finished at 2.3% down.
• Ad revenue growth accelerated to 31% in Q4, driven by the number of ads rising 25% and average price rising for the first time in 2020.
• Full-year 2020 revenues grew 21.8% and comparable EBIT grew 12.7% despite expenses rising 27.8%; operational metrics remained strong.
• Year-on-year revenue growth is guided to be sequentially stable or higher in Q1 and Q2 of 2021, though some headwinds are expected in H2.
• With shares at $272.14, we expect a 2024 exit price of $467, implying a total return of 72% (14.8% annualized) in just under 4 years. Buy.

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