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Facebook (FB) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Facebook (FB) closed at $192.47, marking a +1.43% move from the previous day. The stock outpaced the S&P 500's daily loss of 3.17%. Elsewhere, the Dow lost 3.77%, while the tech-heavy Nasdaq lost 2.28%.

Coming into today, shares of the social media company had lost 9.44% in the past month. In that same time, the Computer and Technology sector lost 7.24%, while the S&P 500 lost 8.05%.

FB will be looking to display strength as it nears its next earnings release. In that report, analysts expect FB to post earnings of $1.92 per share. This would mark year-over-year growth of 125.88%. Our most recent consensus estimate is calling for quarterly revenue of $18.47 billion, up 22.48% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.31 per share and revenue of $85.71 billion, which would represent changes of +44.79% and +21.23%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for FB. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.06% higher. FB is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, FB is currently trading at a Forward P/E ratio of 20.38. This valuation marks a discount compared to its industry's average Forward P/E of 26.09.

Also, we should mention that FB has a PEG ratio of 1.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 111, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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.


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