Facebook Inc $FB is scheduled to report fourth quarter earnings after close on Wednesday (1/27), and consensus estimates are earnings of 67 cents per share and $ 5.36 billion in revenue. Facebook $FB is exposed to the rapid increase in brand advertising and the company has gained share in mobile advertising as well. 2015 was also the year Instagram revenue got off the ground so it will be interesting to see if they can deliver yet another positive earnings report.
Using the Comparison Analyzer available for SprinkleBit Premium members, we have compared Facebook $FB to its closest competitors in the social media and online advertising space. We selected LinkedIn $LNKD, Microsoft $MSFT, Alphabet $GOOGL, IBM $IBM, and Twitter $TWTR for this analysis.
From a fundamental perspective Facebook $FB is overvalued compared to its peers. In our analysis we compared Ebitda Multiple, Enterprise Value to Revenue, MarketCap to Revenue and P/E. The analyzer crunched the numbers and gave us an implied share price of $52.85. Based on today’s (Tuesday 1/26) closing price of $97.31, the analyzer is telling us that the Apple stock is overvalued by 45.71%
In addition to the fundamental analysis, we have also taken a look at what the technicals are telling us. Analyzing the technicals are showing that there is a short term price ceiling at $106, and a short term price floor at $90. Based on today’s (Tuesday 1/26) closing price of $97.31, Facebook $FB has a potential 7.31% downside risk, and a potential 8.93% upside reward.