Back to top

Image: Bigstock

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

Read MoreHide Full Article

Facebook (FB - Free Report) closed at $221.91 in the latest trading session, marking a +1.77% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.7%. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq gained 1.04%.

Prior to today's trading, shares of the social media company had gained 10.83% over the past month. This has outpaced the Computer and Technology sector's gain of 7.4% and the S&P 500's gain of 4.38% 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, the Zacks Consensus Estimate for revenue is projecting net sales of $20.82 billion, up 23.1% from the year-ago period.

Any recent changes to analyst estimates for FB should also be noted by investors. Recent revisions tend to reflect the latest 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 0.13% lower. FB is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, FB is currently trading at a Forward P/E ratio of 24.06. For comparison, its industry has an average Forward P/E of 28.12, which means FB is trading at a discount to the group.

Also, we should mention that FB has a PEG ratio of 1.16. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services was holding an average PEG ratio of 2.56 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 160, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Facebook, Inc. (FB) - free report >>

Published in