The Long-Term Prognosis for Facebook, Inc. (FB)

Analysts at Nomura upped their rating on shares of Facebook, Inc. (NASDAQ:FB) from Neutral to Buy in their opinion released on March 11. UBS analysts again handed out a Neutral rating to FB stock but they lifted target price for the shares in a flash note to investors on January 31. The price target has been raised from $160 to $170. UBS, analysts launched coverage of FB stock with a Neutral rating, according to their flash note to investors on January 31. Analysts at Rosenblatt are sticking to their Buy recommendation. However, on January 31, they lifted target price for these shares to $212 from $206. Analysts at Rosenblatt, made their first call for the stock with a Buy rating, according to a research note that dated back to January 31.

In the period that ended February 28, 2019, short interest in Facebook, Inc. (NASDAQ:FB) stock is on the decline. The 17.53% drop could be an indication that investors and traders expect a strength in the stock price, often as a result of a strength in the business’ fundamentals. The average analyst recommendations at 2 suggests buying these shares. Between February 15 and February 28, the total number of shorted shares amounted to 21.41 million shares. That was 4,549,705 less shares than the total of 25.96 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for FB at the February 28th settlement plunged to 14,233,756, as compared to 17,116,458 at the February 15th report. That brought days to cover to 1.50411, a 0.82% decrease from the 1.516601 days to cover recorded at the prior short interest data release.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Facebook, Inc. (NASDAQ:FB)’s prospects. The earliest insider trade took place on 03/06/2019. Stretch Colin parted with a total of 0.75 thousand shares of company at average share price of $172.6. The total for the sales was set at $129.45 thousand. After this transaction, the VP and General Counsel account balance stood at 105.87 thousand shares. The stock lost -0.06 percent since that insider sale. On 02/28/2019, Fischer David B., VP Bus. & Marketing P’ships, sold 10 thousand shares at a price per share of $162.37. This removed 1.62 million shares from the insider’s fortune and the stock saw a 6.23 percent rally in value since the news became public. This transaction left 58.97 thousand shares in the VP Bus. & Marketing P’ships account. On 02/27/2019, VP and General Counsel Stretch Colin performed a sale transaction worth $122.18 thousand. This sale at $162.91 each has eliminated 0.75 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 5.88 percent increase since the transaction was reported. The insider now is left with 106.62 thousand shares remaining in the account. Sandberg Sheryl, who performs the COO job, sold 55 thousand shares for $9.07 million. The disposal occurred on 02/26/2019 was priced at $164.94 per share. The share price soared 4.58 percent since the reporting date. Sandberg Sheryl now left with a stake of 1.27 million FB stock worth $218.89 million after the insider selling.

Facebook, Inc. (FB) is expected to jump by 13.93 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $275-month high price target. This represents a whopping 59.82 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $200, which represents a return potential of 16.23 percent when compared to the closing price of the stock of $172.07 on Monday, March 11. The lowest price target for the stock is $120 — slightly more than -30.26 percent from FB’s current share price.

The shares are currently floating around the first support level of $171. Below this, the next support is placed in the zone of $169.93. Till the time, the FB stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 65.63 on daily chart, which may remain a cause for concern. If the price breaks below $169.93 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $173.72 mark may result into a pull-back move towards $175.37 level.

FB shares accumulated 2.47 points or 1.46 percent on Monday to $172.07 with a light trade volume of 18.517 million shares. After opening the session at $171.6, the shares went as high as $174.3 and as low as $171.58, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $490 billion and now has 2.85 billion shares outstanding. Facebook, Inc. (FB) stock has gained 3.42 percent of market value in 21 trading days.

FB stock has a trailing 3-year beta of 0.87, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $7.58 a share in the trailing twelve months. The stock’s value has surged 31.26 percent year to date (YTD) against a decline of -5.63 percent in 12 month’s time. The company’s shares still trade -21.29 percent away from its 1-year high of $218.62 and 39.87 percent up from 52-week low of $123.02. The average consensus rating on the company is 2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Facebook, Inc. (FB) are trading at a P/E ratio of 22.37 times earnings reported for the past 12 months. The industry FB operates in has an average P/E of 34.02. Its P/E ratio went as low as 17.32X and as high as 80.96 over the 5-year span. Further, it is sporting a 8.77 on the Price-to-Sales ratio. Compare this with the industry average P/S of 5.77. 83.2 percent is the gross profit margin for Facebook, Inc. and operating margin sits at 44.6 percent. Along with this, the net profit margin is 39.6 percent.

FB will be showing off its Q1 earnings on April 24. Analysts are forecasting revenue to climb 25.1 percent to $15B in the next fiscal quarter, while earnings are seen soaring by nearly -3.55 percent to $1.63 per share. History has shown that shares in Facebook, Inc. have gone up on 14 different earnings reaction days and are predicted to add 0.06 percent when the company reports upcoming earnings. In last reported earnings results, it earned $2.38 per share, better than the $2.19, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $16.9B, better than the $16.4B analysts expected. Earnings are estimated to increase by 22.9 percent this year, 17.24 percent next year and continue to increase by 16.43 percent annually for the next 5 years.