Facebook: 90-second Investment Analysis


We’re gonna analyze Facebook as an investment,
and we’re gonna do it all in 90 seconds… You wanna keep up with stocks but you don’t
have time to read a lengthy report on every company that interests you. You’re busy. I get it. I respect that. So I took the most important considerations
from my research and packed it into 90 seconds. Use this to decide if it’s worth your time
to research further, to keep up with stocks you already own, or to just check in on some
of the largest companies in the world. Fair warning: I’m obviously gonna go fast. Let’s put up a clock. And let’s do this! Facebook operates several of the largest social
platforms in the world. As of this taping, they have a Market Capitalization
of around $520B, with a price per share trading around $180. To own or not to own, that is the question. Here are a couple reasons you might want to
consider owning Facebook: It’s future is extremely promising, with
an almost 19% expected annual earnings growth, which for such a large company is impressive,
and it outpaces the industry average, which is already way ahead of the market. Facebook, which owns, 4 of the 6 most popular
social apps, still hasn’t for the most part monetized two of them, and they’ve been very
successful each time they monetized their assets in the past. The company has consistently performed well
every year realizing Returns on Equity, Assets, and Capital well over the industry average
And – good or bad – despite the significant data privacy concerns, Facebook has proven
its resiliency by yet again increasing it’s Daily Active Users to 1.4B in its most recent
report Finally, the company is extremely healthy
– it has NO Debt! But here are a couple to not own Facebook: Facebook doesn’t pay any dividends, which
is common for its industry, but you should always keep that in mind. The company has a pretty high value right
now, it’s definitely not undervalued, its PE ratio is on par with the rest of the internet
industry, which during bull markets is always high
Its PB ratio is more than 50% higher than the industry and more than 150% higher than
the market. So I’d say the market is just pricing a
lot of growth, which is fine, but it’s also not factoring any sort of bear market or recession. And that’s gonna be the biggest concern
with any company with this high a valuation: if and when the market comes down, companies
with higher valuation multiples, like this, often come down more and faster than everything
else. … so what do you say: buy or no? Do you think they can get those platforms
monetized in a significant way before any sort of major market correction? I look forward to continuing this discussion
in the comments. If you found this helpful, don’t forget
to like and subscribe and click the bell so that you can keep up with all the companies
we cover as we continue to help you build your rapidly-growing, highly-diversified net
worth. I’ll see you in the next one. Take care!

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