In the latest trading session, Facebook (FB) closed at $245.42, marking a +1.4% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.84%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq added 2.51%.
Heading into today, shares of the social media company had gained 2.58% over the past month, lagging the Computer and Technology sector’s gain of 5.23% and the S&P 500’s gain of 3.73% in that time.
FB will be looking to display strength as it nears its next earnings release, which is expected to be July 29, 2020. The company is expected to report EPS of $1.44, up 58.24% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $17.31 billion, up 2.48% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.36 per share and revenue of $77.79 billion, which would represent changes of +14.46% and +10.04%, respectively, from the prior 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 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. The Zacks Consensus EPS estimate has moved 1.34% higher within the past month. FB is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that FB has a Forward P/E ratio of 32.87 right now. This represents a discount compared to its industry’s average Forward P/E of 34.45.
We can also see that FB currently has a PEG ratio of 1.73. 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. The Internet – Services industry currently had an average PEG ratio of 2.7 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 158, putting it in the bottom 38% 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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