Facebook (FB) closed the most recent trading day at $276.14, moving +0.14% from the previous trading session. The stock outpaced the S&P 500’s daily loss of 0.63%. At the same time, the Dow lost 0.55%, and the tech-heavy Nasdaq lost 0.1%.
Prior to today’s trading, shares of the social media company had gained 3.61% over the past month. This has lagged the Computer and Technology sector’s gain of 8.45% and the S&P 500’s gain of 5.91% 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 October 29, 2020. On that day, FB is projected to report earnings of $1.92 per share, which would represent a year-over-year decline of 9.43%. Meanwhile, our latest consensus estimate is calling for revenue of $19.77 billion, up 12.02% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8.12 per share and revenue of $80.59 billion, which would represent changes of +26.28% and +13.99%, respectively, from the prior year.
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. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 0.45% higher. FB is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, FB is currently trading at a Forward P/E ratio of 33.97. For comparison, its industry has an average Forward P/E of 38.64, which means FB is trading at a discount to the group.
Meanwhile, FB’s PEG ratio is currently 1.8. 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. Internet – Services stocks are, on average, holding a PEG ratio of 2.15 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 195, putting it in the bottom 23% 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.
To follow FB in the coming trading sessions, be sure to utilize Zacks.com.
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