Facebook, Inc. (NASDAQ:FB)

CAPS Rating: 2 out of 5


Player Avatar Lituus (86.01) Submitted: 10/10/2012 7:46:52 PM : Outperform Start Price: $19.88 FB Score: +59.18

I'm in!!! Yikes. This one is a wildcard and could go in lots of different directions. However, a P/E of 47 for a company that actually has revenue and profit with huge (potential) upside? That does it for me.There is also this excellent trends report just posted by Business Insider http://www.businessinsider.com/state-of-internet-slides-2012-10#-1that points out Facebook's strong up-and-coming position in mobile advertising.Lastly, I think the future FB will look nothing like the current FB. The bears talk about how FB usage is declining sharply and that the network is doomed to a MySpace-like fate. To confirm this, I personally spend a fraction of the time on FB as I used to. But in my mind it comes down to the fact that social networking is here to stay, FB is by far the largest and most successful network, and a belief that a bunch of smart guys with a lot of resources at their disposal are going to come up with some great new ideas or business models that will make the company succeed. For example, ten years ago who would have predicted that Google would be a major player in mobile operating systems?Now's the time to get in (but don't bet your life savings on it!)...

Member Avatar Roostertail56 (96.39) Submitted: 10/12/2012 10:56:48 AM
Recs: 0

I don't know, as an engineer I have a pretty good grasp of math and a P/E of 47 does not compute. Maybe you can enlighten me on how you arrived at that figure.

Based on my math...assuming a price per share of $20.00 and a Q2 earnings figure of $0.18 per share, my calculated P/E is 111. That's an astonishing number and doesn't relate at good investment. Especially for a company that is flailing about trying to show Wall Street it's doing things to generate income. All the while they're being sued and investigated for a number of things including Privacy issues.

I'll pass....

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