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

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Facebook closed the most recent trading day at $203.91, moving -0.47% from the previous trading session. This change lagged the S&P 500's 0.02% gain on the day. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.17%.

Coming into today, shares of the social media company had gained 15.44% in the past month. In that same time, the Computer and Technology sector gained 6.42%, while the S&P 500 gained 4.82%.

Investors will be hoping for strength from FB as it approaches its next earnings release, which is expected to be July 24, 2019. On that day, FB is projected to report earnings of $1.90 per share, which would represent year-over-year growth of 9.2%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.45 billion, up 24.3% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.09 per share and revenue of $69.29 billion. These totals would mark changes of -6.34% and +24.09%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for FB. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 remained stagnant. FB is currently a Zacks Rank #3 (Hold).

Looking at its valuation, FB is holding a Forward P/E ratio of 28.91. Its industry sports an average Forward P/E of 29.97, so we one might conclude that FB is trading at a discount comparatively.

Meanwhile, FB's PEG ratio is currently 1.43. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.88 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 111, which puts it in the top 44% 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.

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

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