fbpx

Facebook’s Growth is Accelerating

Stock (Symbol) Stock Price

Facebook (FB)

$40

Data is as of Expected to Report Sector

April 28, 2014

Jul 21 – Jul 25

Technology

Sharek’s Take
David SharekFacebook killed it last quarter, coming through with profit growth of 183% on a 72% increase in sales  — the fourth straight qtr of accelerating sales growth. The company made 34 cents, and smashed views by 11 cents. FB only beat by 4 cents the qtr earlier, so this means business is gaining momentum. Last qtr my fair value on FB was $75 and the stock got past $70 before backing down with the rest of the high P/E growth stocks. Right now Facebook is undervalued by around 50% and I think it has a good chance to double by late 2015.
One-Year Chart
FB_2014_Q2I love this chart pattern, nice soft correction. The P/E of 40 is very reasonable considering profits almost tripled last qtr. Estimates look solid and the company should continue to beat the street. This chart is all green.
Earnings Table
FB_2014_Q2_EPSProfits soared 183% LastQtr, and revenue jumped from 72%, up from 63% 2QtrsAgo. Mobile ads were 59% of revenue, up from 52%, 49%, 41% and 23% the prior 4 qtrs.
 
FB crushed the analyst estimates. It beat by 11 cents last quarter, making around 50% more than people expected. Wow.
 
Annual Profit Estimates continue to increase.
 
Quarterly growth continues to show rapid growth should continue.
Fair Value
FB_2014_Q2_PHFacebook continues to be a top-tier stock worth 60 times earnings, now the stock’s undervalued by 50% and I think it could double sometime next year.
Ten-Year Chart
FB_2014_Q2_10yrTwo straight years of +60% profit growth. this company is amazing. Ten year chart doesn’t look great though.
Power Ranking Bottom Line
Growth Portfolio

2 of 26

Facebook continues to show accelerated growth, which is amazing. This is a top-tier stock that can be purchased at a discount right now. I think Facebook can gain 50% this year and could double by next year.
 
FB is ranked 2nd of 26 stocks in the Growth Portfolio Power Rankings and 2nd of 12 stocks in the Aggressive Growth Portfolio Power Rankings

Aggressive Growth Portfolio

2 of 12

Leave a Comment

Your email address will not be published. Required fields are marked *

Not a member? Sign up here for $25 a month.