Valuation Analysis for Facebook Inc (NASDAQ:FB)
Earnings growth at Facebook Inc (NASDAQ:FB) has been declining, but recent earnings growth was 44% and overall earnings growth is expected to be over 33% in calendar 2017. The current PE multiple is 32.6 and that is expected to fall to 27.06 at the end of 2017 if analysts are right about their earnings expectations.
Accordingly, the peg ratio for Facebook represents a stock within our fair value range.
Specifically, the current peg ratio for Facebook is 0.72 and if analysts are right about calendar 2017 results the peg ratio will be 0.8. Our determination suggest that fair value exists somewhere between 0 and 1.5, and the peg ratio for Facebook falls right in the middle of this valuation range.
As a result, we believe that Facebook represents an attractive value so long as it can continue to meet analysts' expectations.