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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Facebook Inc Class A
FB : NASDAQ : Technology
$74.82 0.96 | 1.31%
Today's Range: 74.01 - 74.82
Avg. Daily Volume: 39,265,800
08/29/14 - 4:00 PM ET

Financial Analysis


FACEBOOK INC's gross profit margin for the second quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. FACEBOOK INC is extremely liquid. Currently, the Quick Ratio is 12.48 which clearly shows the ability to cover any short-term cash needs. FB managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 48.56% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)2910.01813.0
EBITDA ($mil)1635.0849.0
EBIT ($mil)1378.0619.0
Net Income ($mil)791.0333.0


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)13956.010252.0
Total Assets ($mil)20769.015724.0
Total Debt ($mil)326.02167.0
Equity ($mil)18346.012349.0


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin92.1690.18
EBITDA Margin56.1846.82
Operating Margin47.3534.14
Sales Turnover0.480.39
Return on Assets11.463.54
Return on Equity12.974.51
Debt Q2 FY14 Q2 FY13
Current Ratio12.8110.58
Debt/Capital0.020.15
Interest Expense0.014.0
Interest Coverage0.044.21


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)2575.02430.88
Div / share0.00.0
EPS0.30.13
Book value / share7.125.08
Institutional Own % n/a n/a
Avg Daily Volume4.050526E76.797876E7

Valuation


HOLD. FACEBOOK INC's P/E ratio indicates a significant premium compared to an average of 36.44 for the Internet Software & Services industry and a significant premium compared to the S&P 500 average of 19.76. For additional comparison, its price-to-book ratio of 10.47 indicates a significant premium versus the S&P 500 average of 2.73 and a significant premium versus the industry average of 5.73. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, FACEBOOK INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
FB 81.05 Peers 36.44   FB 40.58 Peers 29.72

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

FB is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

FB is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
FB 36.64 Peers 46.90   FB 0.49 Peers 0.99

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

FB is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

FB trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
FB 10.47 Peers 5.73   FB 300.00 Peers 23.80

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

FB is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

FB is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
FB 19.18 Peers 8.83   FB 63.66 Peers 32.66

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

FB is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

FB has a sales growth rate that significantly exceeds its peers.

 

 

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