It’s time to revisit a social media giant. Here is the breakdown on $FB, otherwise known as FaceBook.
Current Price: $265.74
52/Wk High: $304.67
52/Wk Low: $137.10
Market Cap: $756.7 Billion
Read below for the breakdown!
Facebook ($FB) is arguably the largest social media company and founder of the social media world with ownership of not only the Facebook platform but industry leading platforms such as Instagram and WhatsApp.
Breaking down Facebook’s stock price, 94.2% of the price is based on the company’s Core Facebook Advertising segment.
Furthermore, the Payments, Fees & Oculus segment makes up 1.6% of the stock price while 4.2% is based on cash according to TREFIS (@trefis).
As of recently the famous FAANG stock has been mostly flat in recent months, moving just over 6% to the downside in the past three months, leaving investors to wonder if the name is a buy, after a volatile few months of trading.
Digging into the numbers, Facebook beat Q4 expectations with an EPS of $3.88, better than the analysts EPS consensus estimate of $3.22. On a year over year basis, EPS improved 51.56%.
As for revenues, total revenues increased to $28.072 billion, representing a 33% increase in total revenues on a year over year basis.
Breaking down revenues, advertising revenues totaled $27.187 billion (Up 31% YoY) while other revenues totaled $885 million (Up 156% YoY).
When it comes to income, income from operations totaled $12.775 billion , a strong increase of 44% year over year while net income increased 53% to $11.219 billion throughout the quarter.
Margins improved as well, with Q4 2020 operating margin totaling 46% for the quarter, much better than the 2019 Q4 level of 42%.
Facebook's user growth and activity was strong as well, with Facebook daily active users (DAUs) totaling 1.84 billion, representing an increase of 11% year over year.
Furthermore, monthly active users (MAUs) increased by 12% year over year to 2.80 billion and family daily active people (DAP) increased by 15% to 2.60 billion.
Shifting into the balance sheet, the numbers are solid.
Total Debt: $523 Million
Total Liabilities: $31.026 Billion
Total Assets: $159.316 Billion
Cash & Short Term Inv: $61.954 Billion
On a valuation basis, Facebook does trade at a premium.
Price to Earnings: 26.35x
Forward Price to Earnings: 19.65x
Price to Sales: 8.58x
Price to Book: 5.91x
Price to Cash Flow: 13.86x
Management has been effective as well.
Return on Equity: 25.42%
Return on Assets: 19.92%
Return on Invested Capital: 22.19%
Given the numbers the analysts are bullish with a mean price target of $341.13/share, representing a 28.37% upside.
The high price target is $375.00/share, representing a 41.12% gain, while the low price target is $205.00/share, representing a -22.86% loss.
The big money is involved as well, with 78.40% of Facebook being owned by institutions. Top holders include The Vanguard Group, Fidelity Management & Research, and BlackRock Institutional Trust.
On a technical basis, Facebook has been flat of recent. According to the six-month charts the MACD is moving sideways with minimal momentum around -1.99.
The six-month charts are also indicating an RSI of 51.45 and CCI of 0.7013, both of which are mostly neutral.
In short, Facebook is one of the best social media plays, while there are regulation risks, history shows the government has been all talk and no action, and with consistent user, revenue, and ad spend growth, the company seems to be a solid long term investment.
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Disclaimer: This is not direct financial advice, simply an opinion based on independent research.