Facebook (FB) closed at $233.42 in the latest trading session, marking a -1.74% move from the prior day. This move lagged the S&P 500’s daily gain of 0.45%. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.52%.
Prior to today’s trading, shares of the social media company had gained 3.21% over the past month. This has lagged the Computer and Technology sector’s gain of 5.91% and outpaced the S&P 500’s gain of 2.08% 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. In that report, analysts expect FB to post earnings of $1.41 per share. This would mark year-over-year growth of 54.95%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.06 billion, up 1.04% from the year-ago period.
FB’s full-year Zacks Consensus Estimates are calling for earnings of $7.19 per share and revenue of $76.75 billion. These results would represent year-over-year changes of +11.82% and +8.56%, respectively.
Investors might also notice recent changes to analyst estimates for FB. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 has moved 1% lower. FB currently has a Zacks Rank of #3 (Hold).
In terms of valuation, FB is currently trading at a Forward P/E ratio of 33.02. For comparison, its industry has an average Forward P/E of 33.88, which means FB is trading at a discount to the group.
Investors should also note that FB has a PEG ratio of 1.74 right now. 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. FB’s industry had an average PEG ratio of 2.65 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 88, putting it in the top 35% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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