How Facebook Inc. (FB) Works From A Technical Perspective

Facebook Inc. (NASDAQ:FB) finished Tuesday with an addition of $6.73 to close at $332.96, an upside of 2.06 percent. An average of 24,833,459 shares of common stock have been traded in the last five days. There was a fall of -$7.69 in the past week. The last 20 days have seen an average of 19,329,266 shares traded, while the 50-day average volume stands at 15,044,368.

FB stock has decreased by -11.51% in the last month. The company shares reached their 1-month lowest point of $322.70 on 10/04/21. With the stock rallying to its 52-week high on 09/01/21, shares of the company touched a low of $244.61 and a high of $384.33 in 52 weeks. In spite of this, the price is down -13.37% from the 52-week high.


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Insider Transactions

5 days have passed since Facebook Inc. (FB) last reported insider trading activity. Zuckerberg Mark, who is COB and CEO, most recently acquired $77,300 shares at $342.63 per share on Oct 01. In this transaction, the insider spent $26,485,562. COB and CEO, Zuckerberg Mark, disposed of 77,300 shares at a price of $340.95 on Sep 30. The insider now owns more than $26,355,063 worth of shares. Prior to that, COB and CEO Zuckerberg Mark went on to Sale 77,300 shares at $341.45 each on Sep 29. An amount of $26,393,922 was transacted.

Valuation Metrics

Facebook Inc. (FB) has a trailing price-to-earnings (P/E) ratio of 24.69, which compares with the 30.20 for the broader industry and 30.30 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Facebook Inc.’s PE ratio has ranged between 47.26 and 17.32. The stock’s beta is 1.32. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 8.86, the price-to-book (PB) ratio at 6.83, and the price-to-cash flow ratio at 28.87.

The quick ratio of Facebook Inc. for the three months ended June 29 was 5.40, and the current ratio was 5.40, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 81.00% against a 5-year average of 83.7%. Facebook Inc.’s EBITDA margin for the year ending June 29 is 45.99%, while its operating margin for the same period stands at 42.50%. Its gross profit as reported stood at $69.27 billion compared to revenue of $85.97 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Facebook Inc.’s return on assets was 24.40%, compared to 19.9% over the last five years. In the past year, the return on investment has been 22.20%, and the 5-year average is 22.2%. Meanwhile, the return on equity (ROE) for the past 12 months has been 30.10% and the 5-year average holds at 23.4%. For the broader industry, ROE averaged 7.41 over the past year.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Facebook Inc. (FB) price momentum. RSI 9-day as of the close on 05 October was 32.78%, suggesting the stock is Neutral, with historical volatility in this time frame at 36.59%.

As of today, FB’s price is $336.24 -2.26% or -$7.69 from its 5-day moving average. FB is currently trading -12.88% lower than its 20-day SMA and +9.07% higher than its 100-day SMA. However, the stock’s current price level is -10.61% below the SMA50 and +21.31% above the SMA200.

The stochastic %K and %D were 12.88% and 8.49%, respectively, and the average true range (ATR) was 9.55. With the 14-day stochastic at 20.17% and the average true range at 8.97, the RSI (14) stands at 34.68%. The stock has reached -7.53 on the 9-day MACD Oscillator while the 14-day reading was at -13.68.

Analyst Ratings

DZ Bank downgraded Facebook Inc. (NASDAQ: FB) to a a Hold rating in its most recent analyst report. Previously, the stock was rated as a a Buy.The consensus rating for Facebook Inc. (FB) among analysts is Overweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell FB, while 11 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 5 analysts, while 34 others rate it as a “buy”.

What is FB’s price target for the next 12 months?

Analysts predict a range of price targets between $300.00 and $500.00, with a median target of $425.00. Taking a look at these predictions, the average price target given by analysts for Facebook Inc. (FB) stock is $421.09.

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