AllAnalyst Report
logoMorningstarMay 11, 2021

Facebook, Inc.: Alphabet and Facebook Remain Attractive; We Reiterate Our 4-Star Ratings and $2,925 and $390 FVEs

Symbols
FB
Sector(s)
Communication Services
Rating
Current Price
$336.75
Fair Value
Economic Moat
Stewardship
Summary

Facebook is the world’s largest online social network, with 2.5 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Facebook refers to this as Facebook Watch. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Facebook operates at a 30%-plus margin.

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Analyst Profile

Ali Mogharabi

Senior Equity Analyst
Ali Mogharabi is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers Internet and software companies.Before joining Morningstar in 2016, Mogharabi was a senior equity analyst for Singular Research, where he covered the technology and biotechnology sectors. His previous experience also includes roles as a senior equity analyst for B. Riley & Co., associate analyst for Roth Capital Partners, sales consultant for Oracle, and business development consultant for Aerospike.Mogharabi holds a bachelor’s degree in economics from the University of California, San Diego; a master’s degree in business administration from University of California, Irvine; and a master’s degree in applied economics from the University of Michigan.