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A true winner in the social media era with TipRanks

© Reuters. FB Stock: A true winner in the social media era

Facebook (NASDAQ :) shares have grown tremendously since their public debut in 2012. Showing its advantage in online advertising space, the company’s stock surged by more than 850% during this period. Alphabet’s Google (NASDAQ :), when combined with Facebook, enables true duopoly in the US online advertising space.

There is a reason why Facebook rises to this level relatively quickly. Social networking is becoming more and more rooted in the daily lives of so many people around the world. Currently, it is estimated that over 80% of online users are social media users. In fact, Facebook’s platform has 2.9 billion monthly active users.

That is impressive.

But over the past few years, Facebook has seen a series of headwinds unfold. There was an old Cambridge Analytica scandal that most people forgot about in the 2016 election. Then there was a series of regulatory investigations into Facebook’s monopoly-like nature.

In addition, Facebook has recently been criticized by regulators for what many see as whistleblowers’ testimony about how Facebook chooses profitability over user safety. I am.

Indeed, these are enough headwinds to spin the investor’s head. However, FB stocks are incredibly resilient over the years.

That’s why I remain bullish on the FB stock in the light of the recent bearish sentiment that has been built around this stock. (See TipRanks Facebook Stock Chart)

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Impressive evaluation

As the latest entrant to the exclusive $ 1 trillion market cap club (at the time of writing, it has been demoted to a market capitalization of “only” $ 930 billion, who counts), FB shares have recently been impressive. I’m looking at the purchases of various investors. In fact, as one of the stocks leading the market’s recovery from pandemic lows, Facebook continues to be one of the largest holdings across various index funds and ETFs.

That said, there’s a reason to believe that Facebook’s reputation is the best of its peers.

FB shares are currently traded at a price-earnings ratio under the age of 25. Looking at this, NASDAQ’s price-earnings ratio is currently just below 30. Therefore, on a fundamentals basis, this strain is cheap.

Indeed, given how high the valuations of other megacap stocks are, it’s unbelievable to see such high quality companies trading at this multiple. Facebook’s top and bottom lines continue to grow rapidly, with the company’s lowest PEG ratio among its peers.

Looking at Facebook’s ratings, high-flying Tesla (NASDAQ :) currently has a price return of 415, Amazon (NASDAQ :) 57, Netflix (NASDAQ :) 66, and even Apple (NASDAQ :) 28:00. is.

Looking at Facebook’s assessment, it’s clear that investors are starting to see this stock as a mature stock. Facebook’s rating has been below 35 for quite some time, arguably downplaying the growth of the megacap company.

But for long-term growing investors, if Facebook continues to fulfill its promises, this could mean a very attractive upside.

Facebook’s ability to grow beyond the pandemic and continue to lead the innovation of online advertising space is noteworthy. This is a company with a very tenacious and loyal customer base and a variety of other platforms that are growing very rapidly within Facebook’s portfolio.

So, purely from a numerical point of view, long-term investors now have a reason to prefer FB stocks.

What do analysts say about FB stocks?

According to TipRanks analyst rating consensus, FB is a strong buy. Of the 31 analyst ratings, there are 25 purchase recommendations, 5 pending recommendations, and 1 selling recommendation.

Facebook’s average price target for this stock is $ 419.87, which means a 27.2% increase. Analysts’ price targets range from a maximum of $ 500 to a minimum of $ 300 per share.

Conclusion

It’s clear that FB stocks offer investors impressive long-term growth potential at prices that look like discounts compared to their peers. However, it is not yet known how the company manages various scandals in this tightly regulated environment.

Therefore, in the short term, it is possible to confirm that some kind of valuation discount will be widespread. But in the long run, this is a company that is growing too fast to stay so cheap.

Disclosure: At the time of issuance, Chris McDonald did not have a position in any of the securities listed in this article.

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A true winner in the social media era with TipRanks

https://www.investing.com/news/stock-market-news/fb-stock-the-real-winner-in-the-age-of-social-media-2639606 A true winner in the social media era with TipRanks

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