Facebook (FB, $276.93) shares get reiterated Outperform rating

On Wednesday, RBC Capital Markets analysts reiterated their Outperform rating on Facebook shares.

RBC also maintained its $320 price target on the social networking behemoths’s stock. Facebook has inserted itself into developing three encouraging product initiatives that lead analysts to "come away with greater conviction" in their above consensus 2021 estimates.

According to the RBC analysts, Facebook’s level of product development is very “underappreciated” in the market.

The analysts feel that the addition of Marketplace, Shops, and Reels has been a tailwind to the company’s positioning amongst its competitors. These initiatives should boost user engagement, and provide Facebook with additional monetization avenues, according to the analysts. “The COVID-generated inflections in Online Retail and Social Media usage have created a massive opportunity that FB is extremely well-positioned against.”, they noted.

The analysts further noted: “Based on our analysis, Facebook Marketplace’s estimated ~1B MAUs [monthly active users] makes it the largest platform of its kind and growing faster than most of its peers (some of the largest of which appear to be declining). We also believe Facebook has competitive advantages in terms of its scale, product innovation, and messaging capabilities that will translate to further market share gains over time.”

While the broad outlook is optimistic, RBC analysts also mentioned major risks like “broad decreasing engagement trends as new competitors arise and take market share, failure to drive significant adoption from major advertising brands limitations due to regulatory/user actions on privacy concerns, and poor user reaction to site redesign/new product initiatives.”

Tickeron's analysis suggests, 

Momentum Indicator for FB turns negative, indicating new downward trend

FB saw its Momentum Indicator move below the 0 level on September 08, 2020. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 90 similar instances where the indicator turned negative. In 49 of the 90 cases, the stock moved further down in the following days. The odds of a decline are at 54%.

Current price $277.23 is above $249.12 the highest resistance line found by A.I. Throughout the month of 08/07/20 - 09/09/20, the price experienced a +2% Uptrend, while the week of 09/01/20 - 09/09/20 shows a -7% Downtrend.

Technical Analysis (Indicators)

Bearish Trend Analysis

The 10-day RSI Indicator for FB moved out of overbought territory on September 03, 2020. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 53 similar instances where the indicator moved out of overbought territory. In 19 of the 53 cases, the stock moved lower in the following days. This puts the odds of a move lower at 36%.

The Moving Average Convergence Divergence Histogram (MACD) for FB turned negative on September 08, 2020. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In 24 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 50%.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 49%.

FB broke above its upper Bollinger Band on August 25, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Bullish Trend Analysis

The Stochastic Indicator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.

The Aroon Indicator entered an Uptrend today. In 211 of 319 cases where FB Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 66%.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 63%. During the last month, the daily ratio of advancing to declining volumes was 1.59 to 1.

The Tickeron Valuation Rating of 65 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.06) is normal, around the industry mean (3.29). P/E Ratio (33.43) is within average values for comparable stocks, (136.52). Projected Growth (PEG Ratio) (0.72) is also within normal values, averaging (2.61). Dividend Yield (0.00) settles around the average of (0.13) among similar stocks. P/S Ratio (8.70) is also within normal values, averaging (7.26).

The Tickeron PE Growth Rating for this company is 54 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is 17 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is 11 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.

The Tickeron Price Growth Rating for this company is 9 (best 1 - 100 worst), indicating outstanding price growth. FB’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.

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