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Facebook (FB) Gains But Lags Market: What You Should Know


In the latest trading session, Facebook (FB) closed at $141.09, marking a +0.34% move from the previous day. The stock lagged the S&P 500′s daily gain of 1.09%. At the same time, the Dow added 1.13%, and the tech-heavy Nasdaq gained 1.51%.

Prior to today’s trading, shares of the social media company had lost 7.34% over the past month. This has lagged the Computer and Technology sector’s loss of 0.28% and the S&P 500′s gain of 1.92% 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 30, 2019. In that report, analysts expect FB to post earnings of $2.16 per share. This would mark a year-over-year decline of 1.82%. Meanwhile, our latest consensus estimate is calling for revenue of $16.40 billion, up 26.4% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.36 per share and revenue of $55.33 billion. These totals would mark changes of +19.48% and +36.11%, respectively, from last year.

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. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 3.14% higher. FB currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that FB has a Forward P/E ratio of 19.11 right now. This represents a discount compared to its industry’s average Forward P/E of 29.13.

Investors should also note that FB has a PEG ratio of 0.85 right now. 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. Internet – Services stocks are, on average, holding a PEG ratio of 2.21 based on yesterday’s closing prices.

The Internet – Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting it in the top 29% 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.

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

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