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Facebook Still Featuring Attractive Valuation

Facebook (NASDAQ:FB) stock has witnessed a great upward move throughout the year, jumping almost 33% year-to-date. The recently released second-quarter earnings report shows the...
Facebook Still Featuring Attractive Valuation © Reuters. Facebook Still Featuring Attractive Valuation

Facebook (NASDAQ:FB) stock has witnessed a great upward move throughout the year, jumping almost 33% year-to-date. The recently released second-quarter earnings report shows the tech giant has surpassed analyst predictions in terms of sales and revenue. The company's fundamentals look great, while growth prospects seem to be intact. 

I continue to be bullish on this stock, for various reasons.

After facing a series of regulatory threats regarding hate speech and fake news, Facebook is finally focusing on its core business of targeted advertising. According to its guidance report, Facebook expects to potentially witness reduced revenue growth in the next quarter.

That said, in spite of a massive 40% price run-up this year, Facebook stock is still trading with a fairly decent valuation.

Let’s dive into the details to find out more about this stock. (See Facebook stock charts on TipRanks)

Facebook is Growing Unbelievably Fast

Investors were slowly losing confidence in FB towards the beginning of the year. Headwinds from the pandemic, recurring regulatory threats, uncertainty about the targeted advertising business, and slowing revenue growth per user were some of the major concerns.

However, over the past few months, the regulatory scrutiny died down, and revenue growth picked up. The company's targeted advertising business began to perform decently due to reduced pandemic-related headwinds.

Notably, Facebook made 98% of its entire revenue from ads in the previous quarter. It displays these ads over numerous platforms like Messenger, Facebook, Instagram, WhatsApp and other third-party websites and apps.

It also generates a considerable amount of revenue through its Portal smart screens and Ocular VR headsets.

The entire family of Facebook apps has served a total of 3.51 billion monthly active users in its previous quarter. Each user generated $8.31 in ARRP (average revenue per person). Facebook has seen a consistent rise in both monthly users and ARRP throughout the last year.

The ARRP growth has been on a constant surge. Consequently, Facebook has been enjoying highly accelerated growth in terms of revenue and earnings since the previous two quarters.

Is Facebook Stock Worth Buying?

Facebook is one of the best tech stocks to dive into at this moment. There are quite a few positive aspects that make FB stock a great pick.

The company comes with impressive business momentum. Facebook knows how to manage and hold its growth streak. Revenue growth has shot up 56% on a year-over-year basis in Q2. The company also expects to post decent revenue growth of 37% in the third quarter, as opposed to Q3 of 2020.

The company's near-term expectations might be a little low, with Q3 revenue growth set to increase by only 1% as compared to Q2. However, it might be surprising to see a higher sequential revenue increase between Q2 and Q3 if the economy reopens entirely.

Moreover, Facebook's valuation is another major factor behind investor enthusiasm. Indeed, based on its peer group, Facebook is trading at a decently conservative valuation. Facebook stock is trading at about 24-times forward earnings at this time. This shows that FB stock is cheap as compared to its growth potential. Analysts believe the company’s earnings per share will jump 29% per year for the next 5 years.

Wall Street’s Take

As per TipRanks analyst rating consensus, Facebook stock is a Strong Buy. Out of 29 analyst ratings, there are 24 Buy recommendations, 4 Hold recommendations, and 1 Sell recommendation.

The average Facebook price target is $420.07. Analyst price targets range from a low of $300 per share to a high of $500 per share.

Bottom Line

Facebook is a rapidly-growing, profitable tech company that comes with superb growth potential, robust fundamentals and a massive market capitalization of $1.06 trillion. At Facebook's current valuation, it can be a great pick for those looking for long-term growth in the tech sector.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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APPROVED BROKERS
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27-09-2021 19:24:59 (UTC+7)

EUR/USD

1.1699

-0.0015 (-0.13%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (1)

EUR/USD

1.1699

-0.0015 (-0.13%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (1)

GBP/USD

1.3698

+0.0015 (+0.11%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (1)

USD/JPY

110.99

+0.26 (+0.24%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (1)

AUD/USD

0.7256

-0.0002 (-0.03%)

Summary

Neutral

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (6)

Sell (2)

USD/CAD

1.2653

+0.0001 (+0.01%)

Summary

↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (0)

Sell (10)

EUR/JPY

129.84

+0.14 (+0.11%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (9)

Sell (0)

EUR/CHF

1.0855

+0.0032 (+0.30%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (1)

Gold Futures

1,751.35

-0.35 (-0.02%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Silver Futures

22.665

+0.240 (+1.07%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (10)

Sell (0)

Copper Futures

4.2720

-0.0135 (-0.32%)

Summary

Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (5)

Sell (1)

Crude Oil WTI Futures

75.44

+1.46 (+1.97%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Brent Oil Futures

78.69

+1.46 (+1.89%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (10)

Sell (0)

Natural Gas Futures

5.474

+0.274 (+5.27%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (10)

Sell (0)

US Coffee C Futures

193.22

-1.13 (-0.58%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (7)

Euro Stoxx 50

4,167.45

+8.94 (+0.21%)

Summary

Neutral

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (4)

Sell (3)

S&P 500

4,455.48

+6.50 (+0.15%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (0)

Sell (8)

DAX

15,576.85

+45.10 (+0.29%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (9)

FTSE 100

7,048.05

-3.43 (-0.05%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (9)

Hang Seng

24,208.78

+16.62 (+0.07%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

US Small Cap 2000

2,253.88

-5.16 (-0.23%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (11)

IBEX 35

8,983.50

+110.40 (+1.24%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (2)

BASF SE NA O.N.

64.590

+0.890 (+1.40%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

Bayer AG NA

47.33

+0.85 (+1.83%)

Summary

Neutral

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (3)

Sell (2)

Allianz SE VNA O.N.

195.40

+3.06 (+1.59%)

Summary

Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (4)

Adidas AG

279.98

-1.59 (-0.56%)

Summary

Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (2)

Sell (4)

Deutsche Lufthansa AG

6.495

+0.262 (+4.20%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (7)

Sell (2)

Siemens AG Class N

146.89

-1.22 (-0.82%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (7)

Deutsche Bank AG

11.001

+0.166 (+1.53%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (3)

Sell (7)

 EUR/USD1.1699↑ Buy
 GBP/USD1.3698↑ Buy
 USD/JPY110.99↑ Buy
 AUD/USD0.7256Neutral
 USD/CAD1.2653↑ Sell
 EUR/JPY129.84↑ Buy
 EUR/CHF1.0855↑ Buy
 Gold1,751.35↑ Buy
 Silver22.665↑ Buy
 Copper4.2720Buy
 Crude Oil WTI75.44↑ Buy
 Brent Oil78.69↑ Buy
 Natural Gas5.474↑ Buy
 US Coffee C193.22↑ Sell
 Euro Stoxx 504,167.45Neutral
 S&P 5004,455.48↑ Sell
 DAX15,576.85↑ Sell
 FTSE 1007,048.05↑ Sell
 Hang Seng24,208.78↑ Buy
 Small Cap 20002,253.88↑ Sell
 IBEX 358,983.50↑ Buy
 BASF64.590↑ Sell
 Bayer47.33Neutral
 Allianz195.40Sell
 Adidas279.98Sell
 Lufthansa6.495↑ Buy
 Siemens AG146.89↑ Sell
 Deutsche Bank AG11.001↑ Sell
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,665/ 5,715
(5,665/ 5,715) # 900
SJC HCM5,635/ 5,700
(0/ 0) # 885
SJC Hanoi5,635/ 5,702
(0/ 0) # 887
SJC Danang5,635/ 5,702
(0/ 0) # 887
SJC Nhatrang5,635/ 5,702
(0/ 0) # 887
SJC Cantho5,635/ 5,702
(0/ 0) # 887
Cập nhật 27-09-2021 19:25:01
Xem lịch sử giá vàng SJC: nhấn đây!
ↀ Giá vàng thế giới
$1,749.36-0.14-0.01%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2204022480
RON 95-II,III2194022370
E5 RON 92-II2071021120
DO 0.05S1658016910
DO 0,001S-V1693017260
Dầu hỏa1564015950
ↂ Giá dầu thô thế giới
WTI$75.38-1.4-1.86%
Brent$79.49-1.44-1.81%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.630,0022.860,00
EUR25.993,7727.346,60
GBP30.324,2231.591,18
JPY200,45212,05
KRW16,7520,39
Cập nhật lúc 18:54:42 27/09/2021
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