Facebook [stckqut]FB[/stckqut] is doing a darn good job of living up to lofty expectations.
The social network reported fourth-quarter earnings and revenue that handily exceeded estimates. Indeed, Facebook’s sales rose 57% from a year earlier to $5.6 billion—their fastest growth rate since the third quarter of 2014. Mobile advertising was 80% of total advertising revenue, up from 69% in 2014’s fourth quarter. And Facebook’s average revenue per user was $3.73, a 33% year-over-year increase, even as its monthly active-user base climbed 14% to 1.59 billion.
That kind of growth is impressive for any company. It is even more so for one with $18 billion in annual sales and an immense user base. Yet Facebook has continued to churn out quarter after quarter of consistently strong results.
Of course, investors are still paying a fairly steep price for that consistency. Facebook trades at 52 times 2016 consensus estimates for its earnings on the basis of generally accepted accounting principles. That is considerably pricier than it looks when using the adjusted earnings metrics the company and Wall Street prefer. On that basis, it trades at only 33 times.