Does Facebook’s Stock Have An Upside Of More Than 10%?

In Menlo Park, California, at the headquarters of social networking business Facebook, there is a sign displaying the company’s emblem. [+] The date is November 10, 2017 in California. (Smith Collection/Gado/Getty Images photo)
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[07/06/2021] [Updated] Stock in Facebook Facebook’s stock (NASDAQ: FB) has risen 28 percent since the end of 2020, with a 10.5 percent upside according to Trefis’ valuation. The S&P 500, on the other hand, has increased by 14% since the end of 2020. Despite the coronavirus crisis, Facebook’s revenue and earnings increased in 2020, thanks to a growth in active users on social networking sites and a shift to e-commerce by individuals and companies, which benefited Facebook’s ad sales. The company’s growth continued in Q1 2021, with revenue of $25 billion, up 46 percent year over year, and earnings of $3.34 per share, up from $1.72 per share in the same time the previous year. In March 2021, there were 1.88 billion daily active users on average, up 8% year over year. A 30 percent year-over-year rise in the average price per ad and a 12 percent increase in the number of ads served drove advertising income in Q1. This upward trend is expected to continue in 2021. The underlying numbers can be seen in our ‘Buy or Sell Facebook Stock’ dashboard.

In 2021, we predict Facebook’s revenue to increase by 36% to $116.8 billion. Furthermore, Facebook’s net income is expected to rise to $36 billion in 2021, resulting in an EPS of $12.58, which, when combined with the P/E multiple of 31x, will result in a valuation of $390, which is 10.5 percent higher than the present market price.
[04/01/2021] [Updated] Is there a 25% upside potential in Facebook’s stock?
We believe Facebook’s stock (NASDAQ: FB) has roughly 25% growth potential in the short term at its present price of around $288 per share. The stock of Facebook has surged by 120 percent since the end of 2018, compared to 59 percent for the S&P500. The Covid-19 pandemic pushed individuals and organizations toward e-commerce, resulting in a change in demand away from discretionary services and toward products in 2020. In the second half of 2020, these developments helped FB’s advertising business.
Facebook first objected to Apple’s announcement of a modification to its privacy policies, which is set to be implemented in early spring. Users will have to opt in to share information with developers under the new policy. However, as the firm strengthens its in-app retail possibilities, the CEO hinted last week that it may make the company stronger in the long run. The Covid-19 outbreak, as well as upcoming iOS modifications, have encouraged Facebook to accelerate the rollout of e-Commerce functionality across its many platforms. However, it remains to be seen how Apple’s privacy reforms will affect Facebook shares and the rest of the digital advertising business. The company’s earnings have risen in recent years, while its P/E multiple has fluctuated. MORE FOR YOU
The income of Facebook increased from $55.8 billion in 2018 to $86 billion in 2020. The net income margin has decreased from 39.6% in 2018 to 33.9 percent in 2020. Earnings per share increased from $7.65 to $10.22, despite a 1.3 percent drop in the number of shares outstanding.
The P/E multiple increased from 17.1x to about 26.7x throughout the same time period. In 2021, the P/E ratio improved somewhat and is now about 28.2x.
What Is The Future Of The Stock?
The global spread of the coronavirus resulted in lockdowns in a number of cities around the world, disrupting industrial and economic activities. As a result, the number of active users on social media sites surged, and consumers and businesses migrated to e-commerce, boosting Facebook’s ad revenue. In 2020, Facebook’s income is expected to climb by 22% to $85.9 billion. Earnings grew to $10.22, up from $6.48 the year before.
The real recovery and its timing are dependent on the coronavirus’s propagation being contained. Trends In U.S. Covid-19 Cases is a dashboard that shows how the pandemic has expanded in the United States and compares it to trends in Brazil and Russia. The market has been ready to “see through” the current bad phase and take a longer-term view as a result of the Fed stimulus, which put a floor on anxiety. With investors focusing on 2021 results, values become more crucial in determining value. Market mood can be volatile, and proof of an increase in new cases could frighten investors once more. We estimate that Facebook’s revenues will reach $105.4 billion in 2021, up 22.6 percent year over year. Furthermore, Facebook’s net income is expected to rise to $32.6 billion, resulting in an increase in EPS to $11.53, which, when combined with the P/E multiple of 31.3x, will result in a valuation of roughly $360 per share, up 25% from the present market price.
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