Facebook (FB) Dips More Than Broader Markets: What You Should Know

Facebook (FB) closed at $164.91 in the latest trading session, marking a -0.34% move from the prior day. This change lagged the S&P 500's 0.13% loss on the day. At the same time, the Dow lost 0.26%, and the tech-heavy Nasdaq gained 0.18%.

Heading into today, shares of the social media company had lost 6.79% over the past month, lagging the Computer and Technology sector's gain of 0.35% and the S&P 500's gain of 1.71% in that time.

Investors will be hoping for strength from FB as it approaches its next earnings release, which is expected to be November 7, 2018. In that report, analysts expect FB to post earnings of $1.48 per share. This would mark a year-over-year decline of 6.92%. Our most recent consensus estimate is calling for quarterly revenue of $13.83 billion, up 33.94% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.08 per share and revenue of $55.46 billion, which would represent changes of +14.94% and +36.41%, respectively, from the prior year.

It is also important to note the 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 remained stagnant. FB currently has a Zacks Rank of #4 (Sell).

Digging into valuation, FB currently has a Forward P/E ratio of 23.37. This valuation marks a discount compared to its industry's average Forward P/E of 34.53.

We can also see that FB currently has a PEG ratio of 1.06. 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. The Internet - Services was holding an average PEG ratio of 2.45 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 168, putting it in the bottom 34% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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