Facebook (FB) Outpaces Stock Market Gains: What You Should Know

·3 min read

In the latest trading session, Facebook (FB) closed at $339.99, marking a +1.39% move from the previous day. This change outpaced the S&P 500's 0.74% gain on the day.

Prior to today's trading, shares of the social media company had lost 5.72% over the past month. This has lagged the Computer and Technology sector's loss of 0.81% and the S&P 500's gain of 1.34% 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 25, 2021. The company is expected to report EPS of $3.16, up 16.61% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $29.34 billion, up 36.65% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.16 per share and revenue of $119.66 billion. These totals would mark changes of +40.34% and +39.2%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for FB. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.4% higher. FB is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that FB has a Forward P/E ratio of 23.68 right now. This valuation marks a discount compared to its industry's average Forward P/E of 28.07.

Also, we should mention that FB has a PEG ratio of 1.05. 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 4.32 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 103, putting it in the top 41% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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