NEW YORK (TheStreet) -- Facebook (FB) - Get Report shares are climbing 2.94% to $89.23 in Wednesday's mid-day trading session on reports that the social networking giant may soon be able to enter China, despite being banned in the world's largest Internet market, Barron's.com reports.
Facebook CEO Mark Zuckerberg and Chinese President Xi Jinping met last week when Xi was visiting the U.S.
According to Taiwan-based publication Want China Times, an image of the two speaking implies that Xi may soon allow Facebook to operate in China, said Teng Jianqun, a researcher with the China Institute of International Studies.
If Menlo Park, CA-based Facebook receives permission to enter the China market, the impact will be huge, as China has close to 700 million users, Forbes noted.
Separately, there was a chain message about Facebook changing its privacy setting circulating around the company's site recently. The chain message is a hoax and Facebook's privacy settings remain unchanged, the Guardian reports.
Separately, 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 a number of 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 7.1%. 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 19.67%.
- 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