Sat, Sep 20, 2014, 1:40 PM EDT - U.S. Markets closed

Recent

% | $
Quotes you view appear here for quick access.

Facebook, Inc. (FB) Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • jjmacauley jjmacauley Nov 22, 2012 6:58 PM Flag

    GOOG has 45% growth, FB has 25% growth, GOOG has 50 Billion revenue, FB has 4 Billion Both depends

    First, I don't accept the premise that the Market Value" of FB or GOOG is predicated solely on the relationship between their "Share Count" and "Expected Revenues". In fact, I can think of a number of other metrics that should be considered in arriving at a "Fair Market Price"...as I'm sure you can. But, let's say I accept the "Algorithm" used by you to arrive at your price conclusion. My first concern is with the Selected Data. GOOG 2013 revenue is projected to be $52 Bill. FB Rev = $6.45 Bill. GOOG today has 330 Mill Shrs outstanding. FB has 2.2 Bill. Therefore......Rev/Shr for GOOG = $157. FB Rev/Shr = $2.93. Applying your Algorithm.... FB should be priced at 1.86% ($2.93 / $157) of GOOG $666 market value..... or $12.38. However, the projected 5 year growth rate you quoted for GOOG is not 45%.....its 13.45%. The projected growth rate for FB = 26.95%....double that of GOOG. So, applying your logic.....if $666 is a fair price for GOOG....given its growth rate....then $24.76 would be a Fair Market Price for FB. Current FB price....$24.32. That said.....do you think GOOG is overvalued or undervalued? Because if you believe...as analysts do...... that GOOG should be $800....or 20% higher than its current price....then using the logic of your "Relative Pricing Model"....a Target Price of $30 for FB....is also completely reasonable. Those are my thoughts. BTW: thank you for taking the time to submit your analysis. Your comments forced me to take a look at FB through a different lens. Happy Thanksgiving.

    Sentiment: Buy

 
FB
77.91+0.91(+1.18%)Sep 19 4:15 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.