FANG stocks have mostly led the way in 2018. What a big surprise, right?
After a dominant campaign in 2017, investors stuck with the market's titans to lead them through 2018 as well. Even when the S&P 500 dropped 10% in 10 days in early February, many of these names held up well.
Specifically, Amazon.com, Inc. (AMZN - Get Report) and Netflix, Inc. (NFLX - Get Report) showed plenty of strength, only briefly dipping before exploding to new all-time highs. Given that we're not even three full months into 2018, though, the gains are actually bordering on insane.
What about the others?
Alphabet Inc. (GOOG - Get Report) (GOOGL - Get Report) stock was struggling, but has since found its mojo. The stock is now up about 10% on the year as it tries to push to new highs. But there's one notable laggard in the group, and that's Facebook Inc. (FB - Get Report) .
Facebook stock is still up almost 4% on the year. So it's not as if it's been a major disappointing and losing investors a ton of money. But why is the stock lagging the group?
Facebook stock has the lowest earnings-based valuation in FANG, has no debt and easily has the best operating and profit margins of the group. Based on those metrics, one would think Facebook stock is leading the way, not lagging.
In fact, despite all of its positive catalysts, Facebook's market cap of "just" $533 billion lags both Amazon and Alphabet, the latter of which sports a $796 billion valuation.
Investors are likely concerned about the company's recent News Feed shakeup and whether it will impact user engagement time and ad revenue. CEO Mark Zuckerberg also said the company is willing to spend a significant sum on security and appears serious about fixing the "fake news" narrative that's prevalent on social media.
Will this slow down revenue growth? That's the concern among investors and likely why the stock has had trouble gaining upside momentum.
Shares have been flirting with a break below its 50-day moving average and should it fail to hold as support, a dip down to the 200-day moving average around $172 could be in store.
If the company is able to beat earnings results and tell a good story on its next quarterly report, investors will likely flock back to Facebook stock, freshly reminded of its strong fundamentals.