Will Facebook Finally Break Through $200?

Noah Kiedrowski - INO.com Contributor - Biotech


Facebook Inc. (NASDAQ:FB) is on tap to report Q4 FY2017 earnings along with its full-year FY2017 numbers. Facebook recently breached the $189 level as earnings approached, however it recently sold off from these highs following news that Facebook would overhaul its news feed in favor of “meaningful social interactions” versus “relevant content.” I think this news was timely with the upcoming earnings announcement as Facebook will once again deliver phenomenal growth numbers across the business with beats on both top and bottom lines. Once the growth trajectory is affirmed with EPS moving in lock-step, the stock only becomes cheaper, and thus this pull-back could be a rare buying opportunity before the stock breaking through the $200 barrier. Facebook ended 2017 with a monster return of 53%, however, considering its growth the stock remains relatively cheap with a P/E of 34.8 and PEG of 1.23 implying an annual EPS growth rate of 28.3%. Once the newly designed news feed launches in conjunction with earnings later this month, I think the stock could break through the $200 level imminently. I feel that Facebook represents value even after this massive run through 2017 and I maintain my long thesis with a price target of $230 by the end of 2018.

News Feed Overhaul

Facebook announced major changes are coming to its news feed to prioritize “meaningful social interactions” on the social media’s news feed as opposed “relevant content.” With this reformatting, users will start seeing less public content from businesses or publishers and more posts from their friends. Mark Zuckerburg expects that the time people spend on the social media network will decrease as a result however it will be “more valuable.” Facebook sold-off on the news as investors and analysts regarded this as an overall negative impact on earnings. Facebook sold-off over 5% on the news or $10 per share as analysts weighed in on the new roll-out. Overwhelmingly, analysts remain positive on shares of Facebook with JP Morgan’s Doug Anmuth maintaining his overweight rating and a $230 target price. I feel that the news feed overhaul will be negligible to earnings, especially over the long term. This sell-off is an excellent opportunity to enter the stock before what will likely be a fantastic earnings announcement. Continue reading "Will Facebook Finally Break Through $200?"

Facebook Continues Double-Digit Growth - $200 Soon?

Noah Kiedrowski - INO.com Contributor - Biotech


Facebook Inc. (NASDAQ:FB) recently announced Q3 FY2017 earnings and once again delivered phenomenal growth numbers across the business with beats on both top and bottom lines with revenue of $10.33 billion and EPS of $1.59 translating into beats of $490 million and $0.31, respectively. Total revenue and net income were up 47% and 79%, respectively. Previously, I authored an article and put forth my thesis that Facebook was the preferred FANG stock, collectively comprised of Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG), considering its growth and valuation relative to its FANG cohort. The Q2 FY2017 earnings reinforced this thesis. Facebook had been on an uptrend heading into earnings and broke through the $182 level.

The stock declined after the earnings call due to talk that the company will increase expenses to beef up its security workforce to combat “abuse on our platforms, ” and as a result, the stock sold off a bit to settle at $179 the next day. The stock has had a tremendous run YTD and is up 55.5%. These numbers may seem staggering, and some may contend that buying at these levels would be cashing the stock. Even at these levels and YTD appreciation, factoring in Facebook’s projected growth with technology comparators such as Google, Netflix, and Amazon, collectively known as the FANG stocks, Facebook is far superior with a lower risk profile. Facebook’s projected growth is more significant than Google’s yet has a P/E ratio that’s in-line with Google’s and a fraction of Amazon’s and Netflix’s. I feel that Facebook represents value even after this massive run and I maintain my long thesis. Continue reading "Facebook Continues Double-Digit Growth - $200 Soon?"

5 Stocks Ready To Rock

Hello traders and MarketClub members everywhere! It’s Thursday and I have five stocks for you that are ready to rock. Each of these stocks flashed a weekly Trade Triangle buy signal yesterday and all of them are sporting good technical chart formations.

Here are the five stocks I will be looking at and providing upside guidance for in today's video.

Infinera (NASDAQ:INFN)
Infinera Corporation provides optical transport networking (OTN) equipment, software, and services to communications service providers.

American Electrical Power (NASDAQ:AEP)
A public utility holding company, engaged in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers.

Ameritrade Holdings (NYSE:AMTD)
Provides securities brokerage services and related technology-based financial services to retail and institutional investors.

HCA Holdings (NYSE:HCA)
Provides health care services. The company owns, operates and manages hospitals.

Morgan Stanley (NYSE:MS)
A financial holding company that provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide.

I will be looking into each of these stocks in detail and providing guidance as to what I think is going to happen to each of them in the coming weeks and months.

Traders! Don't miss out on MarketClub's Special Holiday Promotion! Try the tools for 30 days for only $8.95, then take advantage of a Special Holiday Rate for 90 additional days of access (Save 40%!).

Have a great trading day,

Adam Hewison

President, INO.com

Co-Creator, MarketClub