Many growth stocks have fallen sharply from levels seen earlier this year. But no Facebook (NASDAQ: FB)… Quite the opposite: the technology company’s shares were slowly but surely rallying to record levels. For example, Facebook stock hit an all-time high of $ 311.35 on Tuesday at some point during the trading day. Even the closing price of the stock at $ 306.32 on Tuesday is up 12% YTD, easily beating S&P 500an increase of 8.5% over the same period.
Interestingly, the stock is still trading at an attractive valuation, even after the recent strong performance.
Facebook revenue could grow this year
Faced with a significant slowdown in revenue growth last year as advertisers paused, scaled back, or reconfigured their ad campaigns during a peak cap and hideout last year, the social network has returned to active development after the close of 2020. on an annualized basis, growth accelerated from 11% in Q2 and 22% in Q3.
“It was a successful quarter for our business as the acceleration in online commerce we saw during the pandemic continued throughout the holiday season,” Facebook COO Sherrill Sandberg explained during the company’s Q4 P&L report. …
What’s more, despite continuing significant uncertainty in some ad verticals, Facebook CFO Dave Wehner said he expects Facebook’s annualized revenue growth “to remain stable or slightly increase sequentially in the first and second quarters of 2021.”
Notably, however, Vener warned that there will be ad targeting problems in 2021, and strong comparisons in the second half of the year will put pressure on the company’s year-over-year growth rate in the third and fourth quarters. But Facebook is notoriously conservative in its views. Of course, a slowdown in the second half of the year is highly likely (as Facebook warns) given the company’s tough comparisons. However, the slowdown in Facebook’s revenue growth in the second half of the year is likely to remain in double digits, driving significant revenue growth.
Stocks may be undervalued
While Facebook is showing strong business momentum and management points to a possible acceleration in the near future, the stock is trading at a very conservative estimate. The share price-earnings ratio is only 30 – low given that analysts, on average, expect Facebook’s earnings per share to grow by an average of nearly 22% annually over the next five years.
In short, there is a good reason for the slow but steady gains in stocks in recent times: tech stocks look attractive for long-term investments.
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