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Facebook (FB) Gains As Market Dips: What You Should Know

In the latest trading session, Facebook (FB) closed at $142.08, marking a +0.16% move from the previous day. This change outpaced the S&P 500's 0.04% loss on the day. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq gained 0.16%.

Prior to today's trading, shares of the social media company had gained 0.21% over the past month. This has outpaced the Computer and Technology sector's loss of 4.01% and the S&P 500's loss of 4.99% in that time.

FB will be looking to display strength as it nears its next earnings release, which is expected to be January 30, 2019. The company is expected to report EPS of $2.17, down 1.36% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $16.40 billion, up 26.4% from the year-ago period.

FB's full-year Zacks Consensus Estimates are calling for earnings of $7.37 per share and revenue of $55.33 billion. These results would represent year-over-year changes of +19.64% and +36.11%, respectively.

It is also important to note the recent changes to analyst estimates for FB. These revisions help to show the ever-changing nature of near-term business trends. 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 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. The Zacks Consensus EPS estimate has moved 0.25% higher within the past month. FB is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, FB currently has a Forward P/E ratio of 19.26. Its industry sports an average Forward P/E of 27.77, so we one might conclude that FB is trading at a discount comparatively.

Meanwhile, FB's PEG ratio is currently 0.9. 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 2.16 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 107, putting it in the top 42% 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.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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