Is Facebook Undervalued?
Degenerate Business School
English - February 07, 2022 04:00 - 27 minutes - 18.8 MB - ★★★★★ - 16 ratingsInvesting Business News Business News Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
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Well...just when you thought Facebook was potentially undervalued...it turned out to be wildly overvalued. Or IS IT? Search the constellation of the Megacaps, and it still has the lowest multiple of all the technology giants out there. Especially now after a devastating earnings call that saw user growth petering out and forward guidance slashed.
PE Ratios of MegaCap Tech:
Facebook: 17
Google: 25
Apple: 29
Microsoft: 32
Netflix: 36
Amazon: 54
Tesla: 288
But there's something else lurking beneath the surface. The specter of tightening means that any misstep in earnings, any perceived weakness in growth, can send your stock through the floor like an alternative cryptocurrency.
Meanwhile, Bitcoin defies all human reason and reclaims 40k. What the?
As ever the question remains, where are we in this window of uncertainty? Arguably this earnings slate has done nothing but pause downward pressure posed by the looming tightening cycle. Hard to believe at this point, with bond yields still on the march, that the equity market has priced in the Central Bank's intentions.