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Facebook, Inc. (FB) Message Board

  • lordbalzy lordbalzy Aug 10, 2013 11:19 AM Flag

    FB P/E Too High? Really? Compare it to GOOG in 2004!

    For example, Google's (GOOG) P-E ratio was a whopping 133 when it broke out above a 113.58 buy point in September 2004, not long after it went public. The Internet search engine went on to quadruple by January 2006, to a high of 475.11.

    FB could easily quadruple in two years.

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    • While FB's PE is not derived from GOOG's, your comparison is apples to oranges. GOOG's q2 revenue growth was 150% yoy not in the 50% area of FB. GOOG had a market cap of 34 billion not 94 billion. With all that, FB's PE of 174 is 30% higher than GOOG's which you stated was133.

      GOOG's appreciation of share price was driven by a growth rate that was 3 times that of FB @ a cap that is 1/3 of where FB is now and a PE that is much smaller than FB's. The comparison doesn't give FB a derived value in the future of 4 times today's value.

      FB is going to actually follow a curve based on what the current market assigns it and based on what type of growth they have.

      I traded GOOG from the ipo on and it was some great times with fantastic runs. FB will do what it does. IMHO, I do not believe that FB can quadruple in 2 years. Its growth rate is not there.

      Good luck

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