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.

Facebook facts

Headquarters (founded) Menlo Park, Calif. (2004)
Market Cap $45.4 billion
Industry Internet software and services
Trailing-12-Month Revenue $4.3 billion
Management Founder/Chairman/CEO Mark Zuckerberg
CFO David Ebersman
Trailing-12-Month Operating Margin 13.8%
Cash/Debt $10.2 billion / $706.0 million
Competitors Google
Microsoft
Twitter

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 58% of the 1,186 members who have rated Facebook believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, jjgbm, succinctly summed up the Facebook bear case for our community:

I look at [Facebook] as a fad stock, wrapped up in legal and privacy issues, with revenues based entirely on advertising. That business model works fine, except that no one wants to see ads on [Facebook]. Further, [Facebook] currently has no way to push ads through to its mobile apps. It's a business model I don't trust, in a company that is consistently plagued by privacy issues. I look for it to go the way of Zynga.

Of course, this short pitch doesn't even come close to telling the entire story for Facebook. You're in luck, though. The Fool's brand-new premium report on Facebook tells all sides of one of the most compelling growth stories in the world. You can grab your copy now, which comes with free updates for 12 months, by just clicking here.

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Facebook, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Facebook, Google, and Microsoft, as well as creating a synthetic covered call position in Microsoft. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1986646, ~/Articles/ArticleHandler.aspx, 4/18/2014 2:15:06 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement