Monday 18 December 2017

Facebook is still 20pc overvalued

FACEBOOK'S stock, which has already lost $25bn in value since its public debut, would have to drop another 20pc for its valuation to match other companies that do business over the internet.

Facebook, with a market capitalisation of $79.1bn, is trading at 29.5 times the company's projected 2014 profit of $2.69bn, data compiled by Bloomberg show.

The stock would have to dive to $23.07 to match the average price-to-earnings ratio for the Nasdaq Internet Index based on estimated earnings in the next 12 months, according to the data. Investors have pummeled shares of Facebook since its initial public offering.

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