Shares of Facebook Inc. tumbled 6% on Thursday as investors harped on a negative outlook that showed Facebook might not be able to maintain its goliath growth forever.
But analysts were putting out fires, telling clients that Facebook’s fundamentals remain strong and management is likely just trying to keep expectations in check after three-and-a-half straight years of earnings beats and sales that have quadrupled since mid-2013. If anything, the selloff is a buying opportunity, said SunTrust Robinson Humphrey analyst Bob Peck.
“Management tempered investor enthusiasm,” said Nomura analyst Anthony DiClemente, who has a buy rating and $155 price target on the stock. Peck, who also has a buy rating on the stock, said those comments will “likely weigh on investor sentiment until greater clarity is provided” regarding the magnitude of costs versus the money it spends on R&D.