Facebook (FB) Outpaces Stock Market Gains: What You Should Know

Facebook (FB) closed the most recent trading day at $243.58, moving +1.13% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.78%. At the same time, the Dow added 0.68%, and the tech-heavy Nasdaq gained 1.44%.

Coming into today, shares of the social media company had gained 0.92% in the past month. In that same time, the Computer and Technology sector gained 4.97%, while the S&P 500 lost 1.32%.

Wall Street will be looking for positivity from FB as it approaches its next earnings report date. This is expected to be July 29, 2020. In that report, analysts expect FB to post earnings of $1.41 per share. This would mark year-over-year growth of 54.95%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.06 billion, up 1.04% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.19 per share and revenue of $76.75 billion, which would represent changes of +11.82% and +8.56%, respectively, from the prior year.

Any recent changes to analyst estimates for FB should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1% lower within the past month. FB currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, FB is holding a Forward P/E ratio of 33.48. This represents a discount compared to its industry's average Forward P/E of 34.75.

Also, we should mention that FB has a PEG ratio of 1.76. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2.81 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow FB in the coming trading sessions, be sure to utilize Zacks.com.

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