Facebook is one of the most fascinating companies in the world. Having evolved form a social media network to one of the largest big-data companies in the world, the internet giant is a true juggernaut. The result has been that their stock has rapidly increased in value and now sits at $171.15.
While that price may seem hefty, Investopedia believes it is warranted, and may even be a bargain:
Facebook Inc. (FB) shares often get lumped into overvalued territory with the rest of the FANG’s, including Amazon Inc. (AMZN), Netflix Inc. (NFLX) and Alphabet Inc. (GOOGL). Believe it or not, shares of Facebook trade roughly in-line and are cheaper by some metrics than shares of McDonald’s Corp. (MCD). But yet, Facebook is often viewed as overvalued, despite its blistering revenue and earnings growth expectations. Then there is McDonald’s, with revenue that is expected to shrink, while its only method of boosting profits is by cutting costs. It seems possible that the valuation of Facebook could rise by nearly $86 billion to $582 billion, or 17%. (For more, see: McDonald’s Has A Long-Term Growth Problem.)
If their projections are correct, Facebook’s stock is at the precipice of a major buying opportunity. It seems like every time someone is ready to write them off, they bounce back bigger than ever and this may be another example of that trend.
To find out more about this story, go to investopedia.com. If you found thsi article helpful, why not sign up for our free newsletter and stay up to date with everything in the world of finance.
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