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

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Facebook (FB - Free Report) closed at $212.60 in the latest trading session, marking a +1.88% move from the prior day. This change outpaced the S&P 500's 0.35% gain on the day. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.56%.

Heading into today, shares of the social media company had gained 4.67% over the past month, lagging the Computer and Technology sector's gain of 6.72% and the S&P 500's gain of 4.69% in that time.

Wall Street will be looking for positivity from FB as it approaches its next earnings report date. This is expected to be January 29, 2020. On that day, FB is projected to report earnings of $2.50 per share, which would represent year-over-year growth of 5.04%. Meanwhile, our latest consensus estimate is calling for revenue of $20.82 billion, up 23.1% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for FB. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. FB is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, FB is holding a Forward P/E ratio of 23.03. This valuation marks a discount compared to its industry's average Forward P/E of 27.86.

Investors should also note that FB has a PEG ratio of 1.11 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 2.62 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 163, putting it in the bottom 37% 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.

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


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