Why Facebook Is Being Disliked

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 and see what CAPS investors are saying about the stock right now.

Facebook facts

Headquarters (founded)

Menlo Park, Calif. (2004)

Market Cap

$66.8 billion

Industry

Internet software and services

Trailing-12-Month Revenue

$4.6 billion

Management

Founder/Chairman/CEO Mark Zuckerberg

CFO David Ebersman

Trailing-12-Month Operating Margin

12.1%

Cash/Debt

$10.5 billion / $902.0 million

Competitors

Google

Microsoft

Twitter

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

On CAPS, 43% of the 1,635 members who have rated Facebook believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star MKArch, succinctly summed up the Facebook bear case for our community:

Although not quite as insanely priced as IPO day, Mr. Market is giving me another shot at red thumbing [Facebook]. ... When you get down to it, Facebook may be a great service but its business of selling banner ads no one ever looks at is mediocre at best. I ain't buying mining the useless blather people put on their pages for useful data is going to amount to a substantially better business. At their current market cap of $66.7B, something like 14X revenues, they need a whole new killer business that [no one] knows about just to justify their current market cap.

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 the story for one of the most powerful Internet companies 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 TrackPoisedTo CAPS account.


Read/Post Comments (0) | Recommend This Article (2)

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: 2214144, ~/Articles/ArticleHandler.aspx, 8/1/2014 12:45:26 PM

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