Facebook (FB) turned in a game changing quarter last night, and the shares are up around 25-30% after hours. Too high to buy now? No way.
FB was expected to post profits of $0.14, vs $0.12 a year ago. That’s 17% profit growth. At $26 FB had a P/E of 46. Here’s my review of the shares last quarter. The title was No Momentum. At the time, with the stock at $24, FB was overvalued by 5% and had 28% upside to 2014’s Fair Value. The stock wasn’t a great buy — until today.
Last quarter’s profits were $0.19 — a full five cents over estimates — which translates into 58% profit growth. Outstanding. Mobile ads were exceptional, as Facbook is burrying ads inside the blog, so you can’t avoid them.
Now FB is going to be the hottest stock in the market. The company could make a dollar in profits (over four quarters) in the near future. With revenue growth of 53%, FB is certainly worth 45 times earnings.
I think FB shoots to $45. I’m buying the stock in both the Growth Portfolio and Aggressive Growth Portfolio this morning.
