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

Zacks Equity Research

Facebook (FB) closed the most recent trading day at $230.16, moving -1.1% from the previous trading session. This change lagged the S&P 500's daily gain of 1.37%. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 0.78%.

Wall Street will be looking for positivity from FB as it approaches its next earnings report date. On that day, FB is projected to report earnings of $1.42 per share, which would represent year-over-year growth of 56.04%. Meanwhile, our latest consensus estimate is calling for revenue of $16.94 billion, up 0.34% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.27 per share and revenue of $76.48 billion. These totals would mark changes of +13.06% and +8.18%, respectively, from last year.

Investors might also notice 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.16% higher within the past month. FB is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that FB has a Forward P/E ratio of 32.03 right now. Its industry sports an average Forward P/E of 32.03, so we one might conclude that FB is trading at a no noticeable deviation comparatively.

Investors should also note that FB has a PEG ratio of 1.68 right now. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.6 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 44, putting it in the top 18% 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.

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