U.S. Markets closed

Facebook (FB) Gains But Lags Market: What You Should Know

Zacks Equity Research

Facebook (FB) closed at $186.38 in the latest trading session, marking a +0.12% move from the prior day. This move lagged the S&P 500's daily gain of 0.19%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq gained 0.81%.

Heading into today, shares of the social media company had gained 1.83% over the past month, outpacing the Computer and Technology sector's gain of 0.15% and the S&P 500's gain of 0.56% in that time.

FB will be looking to display strength as it nears its next earnings release, which is expected to be October 30, 2019. In that report, analysts expect FB to post earnings of $1.90 per share. This would mark year-over-year growth of 7.95%. Our most recent consensus estimate is calling for quarterly revenue of $17.32 billion, up 26.19% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.39 per share and revenue of $70.26 billion. These totals would mark changes of -15.59% and +25.83%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for FB. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% lower. FB is currently a Zacks Rank #4 (Sell).

Digging into valuation, FB currently has a Forward P/E ratio of 29.13. This valuation marks a premium compared to its industry's average Forward P/E of 27.71.

We can also see that FB currently has a PEG ratio of 1.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.23 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Click to get this free report Facebook, Inc. (FB) : Free Stock Analysis Report To read this article on Zacks.com click here.