Skip to main content

NEW YORK (TheStreet) -- Shares of Facebook (FB) - Get Facebook, Inc. Class A Report were gaining 2.9% to $85.38 on Wednesday after the social network debuted its virtual personal assistant.

The new virtual assistant, called M, went live today for some Facebook users in the San Francisco Bay Area, according to Wired. M is built into Facebook's Messenger app and is the company's response to Apple's (AAPL) - Get Apple Inc. (AAPL) Report Siri and Microsoft's (MSFT) - Get Microsoft Corporation (MSFT) Report Cortana.

Unlike Siri and Cortana, however, M doesn't rely solely on voice recognition or the cloud. M is powered by Facebook contractors in addition to artificial intelligence. The virtual assistant can perform tasks such as make restaurant reservations and suggest and book weekend vacations thanks to its hybrid nature, according to Wired.

Facebook VP of Messaging Products David Marcus told Wired the company hopes to gain ground on Siri and Cortana by being more powerful and capturing users' intent for the things they want the virtual assistant to do.

"Intent often leads to buying something, or to a transaction, and that's an opportunity for us to [make money] over time," Marcus said.

Insight from TheStreet's Research Team:

TheStreet Recommends

Facebook is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:

Facebook ( (FB) - Get Facebook, Inc. Class A Report; 1,300 shares; 4.71%; Sector: Technology): We believe Facebook is still early in monetizing its base of 1.49 billion users, while also building other strong franchises in Instagram, Messenger and WhatsApp. Recent reports by JP Morgan suggest continued strong engagement in July as a whole as FB's share of mobile Internet time excluding Instagram and WhatsApp was about 24%, and its share of total U.S. Internet time including desktop was 19.1%. Our target remains $110.

- Jim Cramer and Jack Mohr, "Weekly Roundup," originally published 8/21/15 on Action Alerts PLUS

TheStreet Ratings team rates FACEBOOK INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FACEBOOK INC (FB) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 38.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • FB's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 8.47, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $1,880.00 million or 40.19% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.45%.
  • The gross profit margin for FACEBOOK INC is currently very high, coming in at 94.81%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.78% trails the industry average.
  • FACEBOOK INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FACEBOOK INC increased its bottom line by earning $1.10 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.10).
  • You can view the full analysis from the report here: FB Ratings Report