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Facebook Received ‘Buy’ Recommendations from 93% of Analysts

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Shareholder returns and stock trends

Facebook (FB) generated investor returns of 11.5% in the trailing-one-month period and 26.6% in the trailing-12-month period. The company’s stock price gained 2.6% in the trailing-five-day period.

Among its peers, Twitter (TWTR), Yandex (YNDX), Yelp (YELP), and eBay (EBAY) generated investor returns in the trailing-12-month period of 89.4%, 26.6%, 53.5%, and 9.9%, respectively.

Moving averages

On May 31, Facebook closed the trading day at $191.78. Based on this figure, here’s how the stock fared in terms of its moving averages:

  • 8.4% above its 100-day moving average of $177.00
  • 11.5% above its 50-day moving average of $172.00
  • 4.2% above its 20-day moving average of $184.00

Analyst recommendations

Of the 44 analysts covering Facebook, it received 41 “buy” recommendations. One analyst recommended a “hold,” and two analysts recommended a “sell.” Analysts’ stock price target for the company is $219.37, and the company’s median price target is $220.00.

Examining Facebook’s cash flow metrics

Facebook has cash in hand of $43.9 billion. Its price-to-cash-flow and price-to-free-cash-flow multiples are 20.6x and 29.6x, respectively. For the trailing 12 months, the company’s EV-to-cash-flow multiple was 18.9x, and its enterprise-value-to-free-cash-flow multiple was 27.3x.

Facebook’s scale

Facebook was the largest global Internet player in terms of market capitalization at ~$549.4 billion. In comparison, Twitter’s market cap was ~$25.9 billion, Yandex’s market cap was ~$10.7 billion, Yelp’s market cap was ~$3.5 billion, and eBay’s market cap was ~$37.2 billion.

Eye on Facebook’s price multiple

Facebook’s (FB) book value per share works out to $26.70, and its estimated book value per share is $32.10. The stock is trading at a price-to-book value of 7.2x.

The company’s price-to-sales multiple was 12.5x in 2017, and its estimated price-to-sales multiple for 2018 is 9.8x.

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