Facebook (FB) closed the most recent trading day at $276.78, moving -0.08% from the previous trading session. This change was narrower than the S&P 500’s 0.22% loss on the day. Meanwhile, the Dow lost 0.23%, and the Nasdaq, a tech-heavy index, lost 0.38%.
Prior to today’s trading, shares of the social media company had gained 0.01% over the past month. This has lagged the Computer and Technology sector’s gain of 5.2% and the S&P 500’s gain of 2.78% in that time.
Investors will be hoping for strength from FB as it approaches its next earnings release. In that report, analysts expect FB to post earnings of $3.20 per share. This would mark year-over-year growth of 25%. Our most recent consensus estimate is calling for quarterly revenue of $26.23 billion, up 24.43% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.39 per share and revenue of $84.19 billion, which would represent changes of +46.03% and +19.09%, respectively, from the prior year.
Any recent changes to analyst estimates for FB should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. FB is currently a Zacks Rank #3 (Hold).
In terms of valuation, FB is currently trading at a Forward P/E ratio of 29.5. For comparison, its industry has an average Forward P/E of 29.5, which means FB is trading at a no noticeable deviation to the group.
We can also see that FB currently has a PEG ratio of 1.6. 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 industry currently had an average PEG ratio of 2.02 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 132, putting it in the bottom 49% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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