Facebook Is Undervalued | Value Investing News

Facebook Is Undervalued

  • Revenue from ads alone could easily be twice the current size, which means that Facebook is a $100 billion business before counting any of the possible upside from payments, messaging, or any of the other potential business lines that the company could develop on the back of its large network effect.
  • I estimate that the large market opportunity, operating leverage, free cash flow generation and the potential for buybacks will result in Facebook’s earnings growing to $15 per share in the next five years, with plenty of growth still remaining.
  • Fears about the health of the platform has created an extreme negative sentiment in the stock.
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