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

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Facebook (FB - Free Report) closed at $178.08 in the latest trading session, marking a +0.55% move from the prior day. This change outpaced the S&P 500's 0.51% gain on the day. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.75%.

Prior to today's trading, shares of the social media company had lost 4.56% over the past month. This has lagged the Computer and Technology sector's gain of 2.59% and the S&P 500's gain of 3.44% in that time.

FB will be looking to display strength as it nears its next earnings release. In that report, analysts expect FB to post earnings of $1.87 per share. This would mark year-over-year growth of 6.25%. Meanwhile, our latest consensus estimate is calling for revenue of $17.33 billion, up 26.23% from the prior-year quarter.

FB's full-year Zacks Consensus Estimates are calling for earnings of $6.39 per share and revenue of $70.31 billion. These results would represent year-over-year changes of -15.59% and +25.91%, respectively.

It is also important to note the recent changes to analyst estimates for FB. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. FB is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note FB's current valuation metrics, including its Forward P/E ratio of 27.69. This valuation marks a premium compared to its industry's average Forward P/E of 26.06.

We can also see that FB currently has a PEG ratio of 1.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.46 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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