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Why Did Facebook (FB) Stock Climb Monday?

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Shares of Facebook (FB - Free Report) popped 1.29% to close at $191.54 per share on Monday after the company announced its new “Memories” page. But there is a little bit more to the story.


Facebook launched its new Memories pages that allows users to look back over photos and posts from the past. The content and the idea aren’t new to Facebook. In fact, this is more of an aggregation of the social media company’s current “On This Day” feature.

As a whole, Facebook’s new Memories section can include: On This Day, Friends Made On This Day, Recaps of Memories—which will feature seasonal or monthly recaps of memories rolled into a message or short video, and Memories You May Have Missed.

Facebook noted that more than 90 million people use On This Day every day. “Research suggests this kind of reflection can have a positive impact on people’s mood and overall well-being,” Facebook wrote in a statement. “This is why we’re updating the experience to ensure all of your memories are easy to find.”

Facebook’s latest feature comes as part of a larger initiative to get back to its roots of friends and family-based posts, and away from its more clickbait-heavy newsfeed. The company’s data breach scandal and fake news problem prompted Facebook to make this transition in order to get back into the good graces of it 2.20 billion monthly active users.

The company is also reportedly in talks with media companies, including Fox News (FOXA - Free Report) and CNN , for news related programming.

Everything Else

Some investors might not think that Memories is enough to push Facebook stock up over 1%. For their sake, let’s quickly look at why Facebook stock looks pretty appealing right now.

Shares of Facebook are up 67% over the last two years, which, maybe surprisingly, comes in well below fellow tech giant Amazon’s (AMZN - Free Report) 136% surge. Still, over the last year, investors can see that Facebook stock is up nearly 30%, despite its major early 2018 sell-off.


Facebook stock also currently presents solid value. Coming into Monday, Facebook stock was trading at 22.4X forward 12-month Zacks Consensus EPS estimates, which does mark a premium to the S&P 500’s 17.1X.

Yet, 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 relatively attractive at the moment.

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

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