Invest In Facebook (FB) Stock? CNBC Contributors Debate
Bloomberg News
NEW YORK (TheStreet) -- CNBC contributors debated Facebook (FB) - Get Report stock as its shares are gaining by 0.03% to $120.64 this afternoon, on "Fast Money: Halftime Report" Friday.
Facebook is the best performer when compared to "fang stock" rivals Amazon.com (AMZN), Alphabet (GOOGL) and Netflix (NFLX), CNBC's Scott Wapner stated, noting its ability to continuously add monthly users.
This growth "can continue," CNBC contributor Jim Lebenthal estimated.
"I'm not saying it definitely will. Look they haven't stumbled and they're going to stumble at some point, it might even be this coming quarter, but as far as a long-term investment goes, this is still trading at 26 times earnings and a peg ratio of one. That is fairly priced," Lebenthal said.
Lebenthal is not a large-cap growth investor but for those who are, "this is right in the sweet spot," he commented.
On the other hand, Facebook has risks that stem from the entire tech sector, UBSPrivate Wealth Management's Rob Sechan pointed out, the firm has an "overweight" rating on the stock.
"The risk is that the entire sector gets de-fanged with these fang stocks having performed so well last year. The sector has under performed broadly the S&P (500) year to date, the largest sector in the S&P," Sechan explained.
The smartphone market is also "maturing" which is a headwind for Facebook, he continued.
The debate came ahead of Facebook reporting 2016 second quarter earnings next Wednesday.
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Separately, TheStreet Ratings rated Facebook as a "buy" with a score of B+.
This is driven by multiple strengths, which can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins.
We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: FB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.