Does Facebook’s stock have an increase of more than 10%?


[Updated 07/06/2021] Facebook actions

Facebook actions (NASDAQ: FB) has seen an increase of 28% since the end of 2020 and according to Trefis’ valuation has an increase of 10.5%. In comparison, the S&P 500 has grown 14% since late 2020. Despite the coronavirus crisis, FB has seen its revenues and profits increase in 2020 as there has been an increase in the number of active users on media sites. social and individuals and organizations have moved to e-commerce benefiting from advertising revenue from Facebook. Momentum continued in the first quarter of 2021, with the company posting revenue of $ 25 billion, up 46% year-on-year, while profits improved to $ 3.34 per share , compared to $ 1.72 per share in the same period of the previous year. Daily active users averaged 1.88 billion for March 2021, an 8% increase year-over-year. First quarter ad revenue was driven by a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads served. We expect this momentum to continue in 2021. Our dashboard Buy or sell Facebook shares has the underlying numbers.

We are waiting Facebook revenue to increase 36% to $ 116.8 billion for 2021. In addition, its net income is expected to increase to $ 36 billion, increasing its EPS to $ 12.58 in 2021, which, associated with the multiple P / E of 31x, will lead to Facebook rating $ 390, or 10.5% more than the current market price.

[Updated 04/01/2021] Does Facebook’s stock have a 25% upside potential?

At the current price of around $ 288 per share, we believe Facebook actions (NASDAQ: FB) has growth potential of around 25% in the near term. FB stock has risen 120% since late 2018 compared to the S & P500 which rose 59% over the same period. Both revenues and profits increased in 2020 as the Covid-19 pandemic pushed individuals and organizations towards e-commerce and a shift in demand towards discretionary service products. These changes have given FB’s advertising business a boost in the second half of 2020.

Facebook initially protested Apple’s announced change to its privacy policies, which is expected to roll out in early spring. The new policy will force device users to choose to share information with developers. However, last week the CEO suggested it could strengthen the company in the long run by improving its in-app retail options. The Covid-19 pandemic and upcoming changes to iOS have prompted Facebook to step up its pace of deploying e-commerce functionality across its various platforms. However, the impact of Apple’s privacy changes on Facebook’s stock and the rest of the digital advertising industry remains to be seen. Over the past few years, the company has seen its profits rise as its P / E multiple has fluctuated.

Facebook’s revenue increased from $ 55.8 billion in 2018 to $ 86 billion in 2020. Net profit margin increased from 39.6% in 2018 to 33.9% in 2020. Per share, profit fell from $ 7.65 to $ 10.22 while the company recorded a decline of 1.3%. in outstanding shares.

During the same period, the P / E multiple fell from 17.1x to around 26.7x. The P / E improved slightly in 2021 and is currently around 28.2x.

Where is the stock going?

The global spread of the coronavirus has resulted in lockdowns in various cities around the world, which has affected industrial and economic activity. This, in turn, increased the number of active users on social media sites and individuals and organizations turned to e-commerce, benefiting Facebook ad revenue. Facebook saw revenue increase 22% to $ 85.9 billion in 2020. Revenue increased to $ 10.22 from $ 6.48 the year before.

The actual recovery and its timing depend on the wider containment of the spread of the coronavirus. Our dashboard Trends in Covid-19 cases in the United States provides insight into the spread of the pandemic in the United States and contrasts with trends in Brazil and Russia. Following the Fed’s stimulus – which set a floor on fear – the market was willing to “look through” the current period of weakness and take a longer view. With investors focusing their attention on the 2021 results, valuations become important in finding value. Although market sentiment may be fickle, and evidence of a slight uptick in new cases could scare investors again. In 2021, we forecast FB’s revenue to reach $ 105.4 billion, up 22.6% year-on-year. Additionally, its net profit is expected to reach $ 32.6 billion, increasing its EPS to $ 11.53, which, together with the P / E multiple of 31.3x, will lead to a Facebook valuation of around $ 360 per. share, up 25% from the current market price. .

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