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Facebook (FB) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Facebook (FB) closed at $188.08, marking a +1% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.26%. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, added 0.4%.

Prior to today's trading, shares of the social media company had gained 0.03% over the past month. This has lagged the Computer and Technology sector's gain of 3.81% and the S&P 500's gain of 3.92% in that time.

Wall Street will be looking for positivity from FB as it approaches its next earnings report date. In that report, analysts expect FB to post earnings of $1.94 per share. This would mark year-over-year growth of 10.23%. Meanwhile, our latest consensus estimate is calling for revenue of $17.33 billion, up 26.23% from the prior-year quarter.

FB's full-year Zacks Consensus Estimates are calling for earnings of $6.39 per share and revenue of $70.31 billion. These results would represent year-over-year changes of -15.59% and +25.91%, respectively.

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

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.9% higher. FB is currently a Zacks Rank #3 (Hold).

Investors should also note FB's current valuation metrics, including its Forward P/E ratio of 29.12. This represents a premium compared to its industry's average Forward P/E of 26.21.

Investors should also note that FB has a PEG ratio of 1.36 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services industry currently had an average PEG ratio of 2.59 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% 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.

To follow FB in the coming trading sessions, be sure to utilize Zacks.com.


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