Facebook (FB) closed the most recent trading day at $146.96, moving -1.65% from the previous trading session. This change was narrower than the S&P 500’s daily loss of 5.18%. Meanwhile, the Dow lost 6.3%, and the Nasdaq, a tech-heavy index, lost 4.7%.
Prior to today’s trading, shares of the social media company had lost 31.4% over the past month. This has lagged the Computer and Technology sector’s loss of 24.96% and the S&P 500’s loss of 24.68% in that time.
FB will be looking to display strength as it nears its next earnings release. On that day, FB is projected to report earnings of $1.92 per share, which would represent year-over-year growth of 125.88%. Meanwhile, our latest consensus estimate is calling for revenue of $18.44 billion, up 22.29% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.26 per share and revenue of $85.61 billion, which would represent changes of +44.01% and +21.09%, respectively, from the prior year.
Any recent changes to analyst estimates for FB should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.56% lower within the past month. FB currently has a Zacks Rank of #3 (Hold).
Digging into valuation, FB currently has a Forward P/E ratio of 16.14. Its industry sports an average Forward P/E of 22.72, so we one might conclude that FB is trading at a discount comparatively.
It is also worth noting that FB currently has a PEG ratio of 0.93. 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 1.6 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 78, putting it in the top 31% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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