Today's Pre-Market Mover With Heavy Volume: Facebook Inc Class A (FB)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Facebook Inc Class A ( FB) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Facebook Inc Class A as such a stock due to the following factors:

  • FB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 billion.
  • FB traded 7.6 million shares today in the pre-market hours as of 8:45 AM, representing 10.1% of its average daily volume.

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More details on FB:

Facebook, Inc. operates as a social networking company worldwide. It builds various tools that enable users to connect, share, discover, and communicate with each other on mobile devices and computers. FB has a PE ratio of 230.7. Currently there are 27 analysts that rate Facebook Inc Class A a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Facebook Inc Class A has been 66.6 million shares per day over the past 30 days. Facebook Inc Class A has a market cap of $88.1 billion and is part of the technology sector and internet industry. Shares are up 82% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Facebook Inc Class A as a hold. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • FB's very impressive revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues leaped by 53.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although FB's debt-to-equity ratio of 0.18 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 10.22, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for FACEBOOK INC is currently very high, coming in at 87.04%. 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 18.36% trails the industry average.
  • Powered by its strong earnings growth of 285.71% and other important driving factors, this stock has surged by 125.76% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • When compared to other companies in the Internet Software & Services industry and the overall market, FACEBOOK INC's return on equity is below that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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