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Comparing the Insane Growth of Amazon and Facebook Stock

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Amazon (AMZN - Free Report) and Facebook (FB - Free Report) are two of the biggest companies in the world, growing massively over the last several years. The two tech giants also have an outsized influence on how many people live their lives. Amazon changed the way millions of consumers shop, while Facebook impacted how billions of people consume information and interact with friends and family. Now, let’s take a look at their crazy growth.

Stock Price Movement

Facebook went public in May 2012, while Amazon had its IPO all the way back in 1997. Therefore, we cannot make a complete comparison, but this exercise should still be rather fun.

Shares of Facebook have soared over 580% since it went public. Meanwhile, during this same time period, Amazon saw its stock price skyrocket over 700%. Both of these climbs crushed the S&P 500’s roughly 121% surge, which is to be expected.

 

Narrowing the scope to the last three years, some investors might be shocked to see just how much better Amazon stock has performed than the social media giant. This trend continues over the last two years, with shares of Amazon up 131%, while Facebook has climbed by just under 60%—the S&P is up 31%.

 

Over the last year, the disparity between Facebook and Amazon looks even more pronounced.  Year to date, shares of Amazon have climbed 44%, with Facebook stock up just 7% as the social media company continues to face data scandal related-backlash.

 

Valuation

Cleary, both stocks have skyrocketed during the last five years, but Amazon has outperformed Facebook over the last few years. With that said, Facebook stock presents solid value, while Amazon’s forward P/E ratio has remained sky high.

Going into Friday, Facebook stock was trading at 22.4X forward 12-month Zacks Consensus EPS estimates, which marks a premium to the S&P 500’s 17.1X. Meanwhile, Amazon stock is trading at 104.7X, which shouldn’t come as a shock to Amazon investors as the company has famously favored outsized top line growth and forward-looking investments over earnings. 

Diving a little deeper, Facebook stock has traded as high as 31.5X and as low as 19.9X over the last year, with a one-year median of 27.5X. Therefore, it is hardly a stretch to say that Facebook’s valuation looks rather attractive at the moment.

Growth Outlook

Lastly, let’s take a quick look at Facebook and Amazon’s current full-year growth projections.

Facebook’s full-year revenues are projected to soar by 40.6% to touch $57.14 billion, based on our current Zacks Consensus Estimates. The company’s earnings are expected to climb by 24.5% to hit $7.67 per share.

Transitioning to Amazon, the e-commerce powerhouse is projected to report revenues of $237.97  billion, representing a roughly 34% climb—which is staggering for a company of its age and size. Maybe more impressively, the company’s full-year earnings are expected to skyrocket by 180% this year to $12.74 per share.

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