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

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In the latest trading session, Facebook (FB - Free Report) closed at $205.25, marking a +0.41% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day. Elsewhere, the Dow gained 0.27%, while the tech-heavy Nasdaq added 0.3%.

Coming into today, shares of the social media company had gained 2.36% in the past month. In that same time, the Computer and Technology sector gained 3.51%, while the S&P 500 gained 2.69%.

Investors will be hoping for strength from FB as it approaches its next earnings release. The company is expected to report EPS of $1.95, down 18.07% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $20.82 billion, up 23.1% from the year-ago period.

Investors should also note any recent changes to analyst estimates for FB. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. FB is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that FB has a Forward P/E ratio of 32.07 right now. This represents a no noticeable deviation compared to its industry's average Forward P/E of 32.07.

Investors should also note that FB has a PEG ratio of 1.55 right now. 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. FB's industry had an average PEG ratio of 2.72 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 99, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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