The estimates are non-GAAP and PE is based on GAAP numbers. Which means that the PE will be 40-50. It does not really mater though because FB does not trade on a value metric.
FB is not a value stock so you cant compare. Both companies are growing but based on earnings FB is rising and AMZN is not. Remember that FB does not follow a value metric so its value will not be based on its PE.
You cant value two companies on share price. I thought they taught that in grade school. Anyway FB is valued at 317B and AMZN is valued at 297B. There is your value comparison.
..............But did you know that FB is not a value stock? Therefore it cannot be undervalued. It is a growth stock.
Neither one of those things you mentioned are public knowledge nor are they even likely based on past history. Its based more on what you want to happen. Right now FB is on bull run and is going up.
$2.00 is non-GAAP earnings. The PE is based on GAAP earning. Non-GAAP earnings don't account for share based compensation, they adjust for currency, some adjust taxes, and one time costs.
PE is not calculated from non-GAAP earnings.
Probably wont split for a long time. I don't know what is meant by Jack Ma changing BABA valuation. FB value will be based on the market not PE.
That is unfortunately not how a stock is valued. The PE will not be 50 and FB is growth stock and will not be valued on a basis of PE, multiples, ect. Its price and value are based on what the market gives it.
It will depend on where the stock is an how it is trending. While it is not easy to peg a stock, its much harder to peg an option price when the option is otm. If it goes in the money, it will be slightly more than it is in the money.
Writing puts is actually a pretty good trade but why did you write them in the money. That is a very expensive trade. With a far smaller capital outlay, you could have traded a spread that would actually have less risk and earn you more money. Cash covered puts two bucks OTM would be a couple of bucks profit.
Anyway just my two cents. Congrats on the gain and you should be able to close these out pretty inexpensively at the market open.
They will be a little more than they are in the money. If the stock starts trending up they may have some good value after earnings but they wont have huge value until they are close to the money. The thing that happens is that after earnings, the implied volatility goes away. There will be some implied volatility if the stock is going up and appears to be headed in that direction sometime in the future.
The long and short of it is if the stock goes up and continues to go up you will make money. There will not be much money made if these options are out of the money. March contracts do not have an earnings before they expire. If FB trends up today and they don't pin the stock tomorrow, and the stock gets above 110, you might have a decent profit if you sell next week. Otherwise hold on until it gets close to 115.
FB is projected to earn $3 (actually $2.86) and that is a decent number. One of the mistakes made in applying value metrics to growth stocks is this:
The analysts consensus is a non-GAAP number and the actual PE is based on a GAAP number. This year FB is slated to have earnings of $2.16 yet their trailing earnings are around $1.00 which is more than half their projected number.
So even meeting their projected consensus earnings , FB could still have a PE of 60 to 70 at the current share price.
Red, I am not saying this to make a bear case for FB but there are some misconceptions about utilizing value metrics like a PE on a growth stock. One thing that is common among most growth stocks is that they are evaluated on a non-GAAP basis which does not produce a PE. It produces a multiple which is a future number less one time events, stock and option expensing, ect..
I believe their is a good likelihood that FB has really decent chance of good price growth next year. The growth will not be based on a PE. It will be based on the market's perception of the prospects for future growth. The thing that PE's allow us to do is to compare stocks and it lulls us into thinking if a certain stock has a higher PE then ours should have the same. This is not what drives stocks like FB and AMZN. Each has its own story and the stories cant be compared. Whether FB has a PE of 160 or 20, it wont matter. It is what people believe it will do in the future. With a multiple of 2.86, FB would have trailing earnings of around 1.32. Based on interpolation.the PE would be 114. That is not exactly what it will be because no one knows how FB will report.
................but it doesn't matter because FB will grow its price based further out in the future and not on what the stocks current or near term PE suggests.
A lot of the boards. I remember RIMM and GOOG and FCX. Everything but stock. I don't want to discuss politics or racism or hatred. I can imagine the GE board.
Something that would kind of be novel is to see other's opinions on stocks.
Trump has nothing to do with the stock Facebook. Even in a contrived sense it wont have any affect. I agree with leeharold to keep the politics off of a stock board. There are political chat boards and that is where politics belongs.
It looks like it will settle on or near 108. At the end of the day, there will be a swing. Could be $.50 to a little over a buck. I usually play butterflies into expiration for FB. If I can figure a pin a week out, I will do long butterflies. I don't have a position because I don't have a good read.
What I am saying is just from many observations on Fridays. Next week is a short week and some people will take their vacation early. That is why I see the break at the end of the day which will follow the mood of the market. I don't have any real technical reason nor do I have a good gauge just kind of a hunch.
GL and happy trading!
It doesn't look like there will be much option action because oi is pretty low....There is a little pull at 105 but not a lot. I don't think FB has the gas to get to 110. The morning swings are not powerful .so in lieu of anything else happening like an announcement, FB probably wont get to 110.
I miss all of Cramer's shows but he did not say 3.75 in July of all times, Of all the analysts, the highest forecast is 3.16. No one is saying 3.75 except you. Saying..."oh it was 4 months ago but you must have missed" is a statement a person in junior high would use, Besides Cramer is the worst person to listen to. Period
I know you learned not to make things up right? This was when you were maybe 6 or 8. You're a lot older now so please stop it.
Dude at least do your math right (3.75-2.16)/2.16 x100 equals 73.6% not 275%. No one is saying $3.75 in fact the highest analyst is saying $3.16 and the consensus is $2.86.
FB wont trade at 100 times next years multiple nor will it trade at about 200 times earnings. You still mix up a multiple and a PE. They are different and your numbers would get you an F in math. Please don't post numbers if you don't understand math.