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The Zacks Analyst Blog Highlights: Facebook, Alphabet, Twitter, Procter & Gamble and Unilever
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For Immediate Release
Chicago, IL – March 27, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook, Inc. , Alphabet Inc. (GOOGL - Free Report) , Twitter, Inc. , Procter & Gamble (PG - Free Report) and Unilever plc (UL - Free Report) .
Facebook, Inc. has been under tremendous pressure following the uproar over its user data fiasco. Everyone has raised questions over how Cambridge Analytica, which worked on Trump’s election campaign, had gained access to personal data of roughly 50 million Facebook users without their knowledge. Traders dumped its shares fearing that the scandal would compel users to shift from the platform. In fact, shares of the Internet major saw a weekly decline of 14%, the steepest since 2012.
But does it make any sense for long-term investors to pull the trigger on Facebook shares at such low levels? After all, the tech titan isn’t that expensive. The company has an average trailing 12-month P/E ratio of 25.92, which is well below the Internet - Services industry’s average of 29.93.
Moreover, Facebook’s plunge is overdone, and the stock is actually a great buy. Here’s why.
Limited Number of Users Affected
Even though 50 million users sound a lot, it’s nothing when compared to the total of 2.2 billion monthly active users. Thus, only 2% of the platform’s users have been affected. And even for the 2%, nothing on their medical information or social security numbers seems to have been accessed.
This is just an isolated case and there is much ado about nothing. Especially, when the company’s expected earnings growth rate for the current year is a solid 16.4%, and 26.2% compounded annually over the next five years.
Facebook Bridges Gap With Google in Ad Revenues
Lest we forget, Alphabet Inc. and Facebook control around half of the ad market. Facebook is, in fact, steadily making up ground. In 2014, 37% of Internet advertising revenues went to Google, compared to Facebook’s 18%. But, the lead shrunk to 33% to 19% in 2015, 32% to 19% in 2016, and 32% to 20% in 2017.
It might take some time for Facebook to outdo Google, but the gap is closing fast. And there is little competition from other players. The next major competitor is Twitter, Inc., with just 4.4% share.
Meanwhile, there have been some concerns that the big consumer companies like Procter & Gamble and Unilever plc are trimming digital ads. However, analysts predict that digital ad spend will hit $376 billion in 2021, up from $228 billion in 2017. And if Facebook can gain 28% of market share by that time, it will earn $100 billion in revenues — a huge increase from last year’s $41 billion. So, there is still an encouraging runway ahead.
Facebook Stock Verdict
Facebook’s public relation issues have been going from bad to worse but this has made the stock cheaper than usual. The company is continuing to catch up with Google in the digital ad space that itself has been gaining traction. All in all, Facebook could gain more once it survives this controversy.
To top it, investors have seen 16 earnings estimate revisions move higher, compared with none lower, at least when looking at the key current year time frame. And the consensus estimate for Facebook has trended upward over the past 60 days, as estimates have risen from $6.61/share two months ago to just $7.17/share right now. If this wasn’t enough, Facebook flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Facebook, Alphabet, Twitter, Procter & Gamble and Unilever
For Immediate Release
Chicago, IL – March 27, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook, Inc. , Alphabet Inc. (GOOGL - Free Report) , Twitter, Inc. , Procter & Gamble (PG - Free Report) and Unilever plc (UL - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Facebook Is a Screaming Buy, Despite Data Scandal
Facebook, Inc. has been under tremendous pressure following the uproar over its user data fiasco. Everyone has raised questions over how Cambridge Analytica, which worked on Trump’s election campaign, had gained access to personal data of roughly 50 million Facebook users without their knowledge. Traders dumped its shares fearing that the scandal would compel users to shift from the platform. In fact, shares of the Internet major saw a weekly decline of 14%, the steepest since 2012.
But does it make any sense for long-term investors to pull the trigger on Facebook shares at such low levels? After all, the tech titan isn’t that expensive. The company has an average trailing 12-month P/E ratio of 25.92, which is well below the Internet - Services industry’s average of 29.93.
Moreover, Facebook’s plunge is overdone, and the stock is actually a great buy. Here’s why.
Limited Number of Users Affected
Even though 50 million users sound a lot, it’s nothing when compared to the total of 2.2 billion monthly active users. Thus, only 2% of the platform’s users have been affected. And even for the 2%, nothing on their medical information or social security numbers seems to have been accessed.
This is just an isolated case and there is much ado about nothing. Especially, when the company’s expected earnings growth rate for the current year is a solid 16.4%, and 26.2% compounded annually over the next five years.
Facebook Bridges Gap With Google in Ad Revenues
Lest we forget, Alphabet Inc. and Facebook control around half of the ad market. Facebook is, in fact, steadily making up ground. In 2014, 37% of Internet advertising revenues went to Google, compared to Facebook’s 18%. But, the lead shrunk to 33% to 19% in 2015, 32% to 19% in 2016, and 32% to 20% in 2017.
It might take some time for Facebook to outdo Google, but the gap is closing fast. And there is little competition from other players. The next major competitor is Twitter, Inc., with just 4.4% share.
Meanwhile, there have been some concerns that the big consumer companies like Procter & Gamble and Unilever plc are trimming digital ads. However, analysts predict that digital ad spend will hit $376 billion in 2021, up from $228 billion in 2017. And if Facebook can gain 28% of market share by that time, it will earn $100 billion in revenues — a huge increase from last year’s $41 billion. So, there is still an encouraging runway ahead.
Facebook Stock Verdict
Facebook’s public relation issues have been going from bad to worse but this has made the stock cheaper than usual. The company is continuing to catch up with Google in the digital ad space that itself has been gaining traction. All in all, Facebook could gain more once it survives this controversy.
To top it, investors have seen 16 earnings estimate revisions move higher, compared with none lower, at least when looking at the key current year time frame. And the consensus estimate for Facebook has trended upward over the past 60 days, as estimates have risen from $6.61/share two months ago to just $7.17/share right now. If this wasn’t enough, Facebook flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.