Investors often make a snap judgement after earnings. However, sometimes it is worthwhile to dig deeper and discover what it all means for the future trajectory of the stock.
In the case of Facebook (FB), yes they did have a massive miss this earnings season. Gladly they gave ample clues that things were shaping up nicely for next year. This has earnings estimates moving higher for 2020 pointing to over 30% year over year growth. That is pretty special growth for a company its size.
Now let’s dig into the stock a bit deeper from a POWR Ratings perspective to see if it has what it takes to move higher in the weeks and months ahead.
Buy & Hold Grade = B
Shares are actually down -1.57% in the past year…but then again many in the tech sector were set back a great deal during the Q4 correction. When we look at FB on a 6 month basis we see a more attractive +27% return which shows ample long term momentum for shares.
Trade Grade = A
FB has enjoyed a strong 2019 to date. However, shares have seen a bit of sell off since earnings. Then put in the overall market weakness and you understand why shares are off their recent highs. However, it is pointing to an attractive value proposition to potentially get in now.
Industry Rank = A
The Internet group of stocks is ranked #16 out of 123 which is good enough for a strong A rating. It is hard for a stock to swim against the tide of their industry. So it is good seeing the friendly trend for the group as a whole.
Peer Grade = B
FB is ranked #8 within its industry out of 51 stocks. That is strong showing in a group filled with other quality names like Amazon, Google, Netflix and more. (See the full list here).
POWR Rating = B (Buy)
When you add it all up Facebook currently is worthy of a POWR Rating of B (Buy). With earnings looking up and price coming down, FB has the makings of a stock likely to outperform. And now you can get it at a more favorable entry price.
StockNews.com is the home of the POWR Ratings system. Here are some quick links to get you to the most popular POWR Ratings features:
Full List of “A” Rated Strong Buy Stocks
To see Steve Reitmeister use his 40 years of investment experience to hand select the best POWR Ratings stocks, then check out the Reitmeister Total Return portfolio.
Facebook, Inc. Common Stock NASDAQ: FB shares were trading at $281.84 per share on Monday morning, down $6.26 (-2.17%). Year-to-date, has gained 13.27%, versus a % rise in the benchmark S&P 500 index during the same period.
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