1-Star Stocks Poised to Plunge: Facebook?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, social networking giant Facebook (Nasdaq: FB) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Facebook's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Menlo Park, Calif. (2004)|
|Market Cap||$72.8 billion|
|Industry||Internet software and services|
|Trailing-12-Month Revenue||$4.0 billion|
|Management||Founder/Chairman/CEO Mark Zuckerberg|
CFO David Ebersman
|Trailing-12-Month Operating Margin||43.3%|
|Cash/Debt||$3.9 billion / $706.0 million|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 57% of the 547 members who have rated Facebook believe the stock will underperform the S&P 500 going forward.
Overvalued. ... It's a good and useful business and there are additional opportunities to monetize for them, but it simply doesn't make rational sense to spot them 5 years or so worth of premium valuation while they "grow into it." This stock is sideways at best in the 2-4 year horizon of my pick and possibly a whole lot worse. ... And don't get me started on all the control rights that have been stripped away from this stock. If there is one thing the executives of these tech firms (like Google, etc.) do not suffer from it is a lack of self-esteem. Holding one's self in such high regard might be considered hubris in certain circles, but apparently not among the legions of investors that enthusiastically gobbled down this offering.
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Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.
At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. The Motley Fool owns shares of Amazon.com, Google, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com, Google, and Microsoft, as well as creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days.We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.