Here’s a Reason Facebook (FB) Stock is Lower Today

NEW YORK (TheStreet) -- Facebook (FB) is being taken to court by Belgium's privacy commission, which has accused the social networking company of tracking its users and even monitoring the activities of non-Facebook users by means of plug-ins or cookies, Reuters reports.

Shares of Facebook are down by 1.59% to $80.23 in late morning trading on Monday.

The Privacy Commission is also working with German, Dutch, French and Spanish agencies. Last month Belgium accused Facebook of ignoring European privacy laws after attempting to find out more about Facebook's practices.

"We did not get satisfactory answers so this was the next step," a spokeswoman for the Commission for the Protection of Privacy (CPP) told Reuters.

Court will convene on Thursday and the commission has asked for an order that will immediately block Facebook from monitoring non-users, Reuters added. Facebook reportedly said it is "disappointed" that the CPP would agree to meet with the company on Friday, then announce it is taking it to court one day before.

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 some important positives, 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, expanding profit margins, good cash flow from operations 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 5.8%. Since the same quarter one year prior, revenues rose by 41.6%. 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 0.01 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 7.97, 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 94.44%. 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 14.45% trails the industry average.
  • Net operating cash flow has increased to $1,700.00 million or 32.29% when compared to the same quarter last year. Despite an increase in cash flow, FACEBOOK INC's average is still marginally south of the industry average growth rate of 41.44%.
  • FACEBOOK INC's earnings per share declined by 28.0% 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 ($2.00 versus $1.10).
  • You can view the full analysis from the report here: FB Ratings Report

If you liked this article you might like

Buy Stocks That Are Right for You: Cramer's 'Mad Money' Recap (Friday 2/16/18)

Buy Stocks That Are Right for You: Cramer's 'Mad Money' Recap (Friday 2/16/18)

How Jim Cramer Knew to Sell Just Before The Dow Jones Industrial Average Tanked

How Jim Cramer Knew to Sell Just Before The Dow Jones Industrial Average Tanked

General Electric Is One Mega-Cap Stock You Must Still Avoid

General Electric Is One Mega-Cap Stock You Must Still Avoid

Stock Markets Are Booming Again but Panties Prices Continue to Plunge

Stock Markets Are Booming Again but Panties Prices Continue to Plunge

Jim Cramer: Short Footprints Everywhere

Jim Cramer: Short Footprints Everywhere